Why women already need to work to 70 - and what to do about it

The gender pay gap is getting bigger — and lower pay means less super.  So how can you catch up?

According to the Workplace Gender Equality Agency, the pay gap between men and women is big and getting bigger. In May 2014, the average full time female worker earned $1,275.90 a week — $283.20 less than the average man, a pay gap of 18.2%1.

Even more disturbingly, the gap has widened noticeably over the last 10 years. After reaching a low of 14.9% in November 2004, it has gradually risen to its current level, the highest in around 20 years.

Lower pay doesn’t just mean less money in your pocket now. Because employer super contributions are calculated as a percentage of your salary, lower pay today means less super tomorrow. That can have an enormous impact over time.

Working to 70 — and beyond

According to new figures from Colonial First State’s FirstTech team, the growing gender pay gap means the average 20 year old woman is now set to retire with around $97,500 less super than her male colleagues — $438,248 versus $535,756. As a result, she will need to work an extra five years just to catch up.2

Even that figure is likely to understate the problem, since it compares two people working full time without taking time out from the workforce during their careers. The reality is that women are far more likely than men to work part time or leave paid work entirely to care for young children and aging parents.

According to the Australian Institute for Family Studies, at the time of the 2011 census only 34% of women aged between 35–44 were working full time, compared to 75% of men.3And every year out of the workforce means another year’s super to catch up on.

Closing the gap

Naturally, we’d all like to see the gender pay gap shrink or even disappear. The good news is that a growing number of Australian companies are actively working with the Workplace Gender Equality Agency to promote greater wage equality — including the Commonwealth Bank. But the reality is that the gap isn’t likely to vanish anytime soon.

That means women need to take control of their own financial futures, acting now to make sure they’re financially prepared for a comfortable retirement.

One of the most effective ways to boost your super is by saving extra from every pay cheque with salary sacrifice. Because salary sacrifice contributions come from your pre-tax salary, they can help you build a bigger super nest-egg faster, by taking advantage of the low 15% tax rate on concessional super contributions.

That’s especially important if you’re planning to spend time away from the paid workforce in the future, or if you’re working part time.

Talk to a financial adviser

A financial adviser can help you find the best strategy for boosting your super, so you can stop work when you want to — not when you can afford to. They’ll help you calculate your personal super target, then create a practical plan to achieve it.


If you would like more insight into what financial solutions are available for women, please find more details here on our inaugural Women and Financial Security Luncheon held in August.



Workplace Gender Equality Agency Gender Pay Gap Statistics, August 2014.
2 Based on a man and woman starting work at age 20 with no existing super and retiring at 65, both earning the average wage according to the ABS.
3 AIFS, Families working together: Getting the balance right, 2013.


The information contained in this material is current as at date of publication unless otherwise specified and is provided by ClearView Financial Advice Pty Ltd ABN 89 133 593 012, AFS Licence No. 331367 (ClearView) and Matrix Planning Solutions Limited ABN 45 087 470 200, AFS Licence No. 238 256 (Matrix). Any advice contained in this material is general advice only and has been prepared without taking account of any person’s objectives, financial situation or needs. Before acting on any such information, a person should consider its appropriateness, having regard to their objectives, financial situation and needs. In preparing this material, ClearView and Matrix have relied on publicly available information and sources believed to be reliable. Except as otherwise stated, the information has not been independently verified by ClearView or Matrix. While due care and attention has been exercised in the preparation of the material, ClearView and Matrix give no representation, warranty (express or implied) as to the accuracy, completeness or reliability of the information. The information in this document is also not intended to be a complete statement or summary of the industry, markets, securities or developments referred to in the material. Any opinions expressed in this material, including as to future matters, may be subject to change. Opinions as to future matters are predictive in nature and may be affected by inaccurate assumptions or by known or unknown risks and uncertainties and may differ materially from results ultimately achieved. Past performance is not an indicator of future performance.