Australia’s retirement system is facing a crisis, and it’s not just about a few unlucky individuals. A new report reveals that millions of workers, particularly older women, are headed towards a retirement with insufficient superannuation – and some might find themselves living in poverty. With life events like caregiving responsibilities, separation, and family violence eating away at retirement savings, the reality for many could be far worse than expected.
The Superannuation Gap: A Deepening Crisis for Women
According to the report by Impact Economics and Policy for the Super Members Council, it’s not just about earning less – though that’s a factor too. It’s about life happening. For women, especially, the superannuation gap can be as large as $95,000. Why? Because of events like separation or caregiving for family members, which are more likely to push women into early retirement or part-time work. Imagine working for decades only to find out your super balance is far lower than you expected – that’s the harsh reality many are facing.
Women at Greater Risk of Early Retirement
Misha Schubert, CEO of the Super Members Council, referred for Yahoo Finance to the findings as a “wakeup call.” And it’s clear why. The gap between men’s and women’s retirement savings is still far too wide, with women nearly 1.5 times more likely than men to be forced into early retirement. The reasons behind this are varied – health issues in the family, lack of flexible work options, or being the primary caregiver for a sick partner or elderly parent. It’s these events that can strip away the ability to save for the future.
The Caregiving Burden: A Barrier to Retirement Savings
In fact, about one in seven women aged 45 to 65 finds themselves caring for a family member. That’s a huge number when you think about how much time and energy is taken up by such responsibilities. And yet, women are three times more likely than men to be in this position. For single women, the picture is even bleaker. Nearly 60% of older female renters already live below the poverty line, a trend that’s only worsening.
The Impact of Separation and Divorce on Financial Security
Then there’s the issue of homeownership. Many women, especially after a divorce or separation, lose ownership of their homes, which puts them at a higher risk of falling into poverty if they don’t repartner. The numbers don’t lie: more than two in five women aged 80 or older live in poverty. And about a quarter of women aged 60 or older are in the same situation, compared to 21% of men.
The Need for Bold Reform
As much as the government has worked on improving the superannuation system, there’s still a long way to go. The current system isn’t working for everyone, especially low-income women. Without urgent action, the retirement prospects for future generations of women – already facing higher caregiving burdens and lower pay – could look very grim.
We need bold reforms, and we need them now. The question is, will policymakers rise to the challenge before it’s too late? Let’s hope this report serves as the wake-up call needed to bring about meaningful change. Because without it, the gap will only continue to widen, and more Australians will find themselves struggling to retire with dignity.
