Working Women With Kids Up To $50,000 Behind In Super
In this day and age, women no longer need to choose between a career and a family, but taking time off to have children can cost them tens of thousands of dollars in lost compulsory super contributions.
New research from Suncorp shows women who take as little as two years off work could fall $50,000 behind their male partners come retirement.
Suncorp Life Head of Superannuation Vicki Doyle said super baby shortfalls are debts no one really knows about.
“(The super baby debt) refers to the amount of money women are losing out in retirement savings by taking time off work to raise a child.
“You take time off and you have no income therefore you don’t get any super-related contributions during that time.”
Women are being caught out because the situation is overlooked at the time. With a little forward planning, parents who take time off to look after children can still enjoy a happy retirement.
When parents plan on taking time off, they should make voluntary super contributions to make up for lost time.
Association of Superannuation Funds of Australia chief executive officer Pauline Vamos said for every two years out of the workforce, you should be putting in an extra one per cent into your super for the rest of your working life.
“If you have three children and you have two years off each time then you should be contributing three per cent.
“Super is about putting in money over the longer term to catch up and it’s very important you do that.”
Currently, employers are required to pay 9 per cent of an employee’s salary into a super fund.
This figure will eventually rise to 12 per cent and should be in place by 2020.