Having a family can create a 'Super Baby Debt' for mothers of
up to $50,000 by the time they reach
retirement new research has found1.
The debt occurs when women suspend their normal
superannuation contributions when they take two or more years
out of the workforce to have children.
Over the life of their careers this can leave mothers up to
$50,000 further behind men in the quest to ensure a
comfortable retirement.
To overcome this problem, women should adopt 'The One Per
Cent Rule' by adding an extra 1 per cent to their
superannuation contributions for the rest of their working
lives.
The financial drain on women is enormous, with almost 300,000
babies born in Australia every year, and many employed
mothers taking time out of the workforce in the first 12
months after birth.
Suncorp Life Head of Superannuation Vicki Doyle joined
Association of Superannuation Funds of Australia CEO Pauline
Vamos in proposing that women should understand they have
options when it comes to improving their retirement
lifestyles and that Government had a role to play.
"The 'Super Baby Debt' can really eat away at a woman's nest
egg, but women have the power to
overcome it by following 'The One Per Cent Rule'," Ms Doyle
said.
"The Rule is that, for every two years out of the workforce,
women need to make an additional 1 per cent contribution for
the rest of their working life.2"
Table 1:
Current mother's salary Super Baby Debt (at retirement) |
$65,000 $28,000 |
$85,000 $36,500 |
$115,000 $50,000 |
1 Calculated using the Super Guru Retirement Projector based on comparisons on three scenarios of a woman 32 years old, two years out of the workforce at salaries as follows: a) $65,000 salary (super baby debt $28,000); b) $85,000 salary (super baby debt $36,500); c)
$115,000 salary (super baby debt $50,000) compared to a woman 32 year old, same salaries and super balances, and no time out of the
workforce.
2 Assumes parental leave is taken from ages 32-33 and retirement at 65.
1
Media enquiries: Adam Connolly 0417 170 084
Contributing to the issue is the continued confusion, apathy
and frustration felt by women as surveyed through the
Suncorp-ASFA Super Attitudes Survey 20123.
Findings show women feel the superannuation system is overly
complicated and alienates them from their retirement
planning, with: