Australians’ superannuation balances are taking a hit due to health issues

AUSTRALIANS are taking large chunks of time off work and it’s taking a significant hit to how much money women have.

HEALTH issues are the key driver behind Australians taking large chunks of time off work and it’s taking a significant hit to their retirement balances.

For those who do take health breaks just 17 per cent are choosing to do so, whereas the majority are being forced to take time off because of difficult circumstances.

New analysis by one of the nation’s largest super funds, REST, which has more than 2 million members mainly in the retail industry, has revealed Australians take breaks from the workforce on average 3.5 times during their working lives.

This is leaving women almost with $161,000 less in superannuation savings than men.

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Women are being left with much less money in superannuation once they stop work.

In the report, Making a Break, it examined information from more than 1000 Australian men and women who have taken a career break of at least three months during their career.

It found for Australians retiring at 67 when having one career break each, men ended up with about $880,000 in super compared to women at just $599,000.

The figures are based on the respondents’ wages, how many breaks they take and lost earnings including superannuation.

Few women are contributing money to their super savings when they take a career break.

But REST spokeswoman Mary Atley said a lack of financial planning by women was going to leave many behind in savings once they stop work.

“Many are going to take a fairly big hit and they are far less likely than men to plan for that career break,’’ she said.

“Only 16 per cent actually made a contribution to their super during that break whereas for men it’s double that, so women are way behind the eight ball.”

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Ms Atley also said when women return to work the report found they earn 29 per cent less than men.

When women return to work after men they are getting paid about 29 per cent less.

The research revealed the average age for women to take a break is 33 and the key reasons for females taking time off is to have a baby (50 per cent), care for children (49 per cent) and health reasons (45 per cent).

Whereas for men they usually take a chunk of time off work at 44 and the main reasons are for health (32 per cent.)

Association of Superannuation Funds of Australia’s figures show for people to achieve a comfortable retirement, singles need $545,000 in superannuation and couples require $640,000 by age 67, while also owning their home outright and having good health.

ASFA’s chief executive officer Dr Martin Fahy urged all Australians to try and tip in any extra money into their funds to fatten their super and also take out income protection insurance which cover injury and illness.

ASFA’s chief executive officer Dr Martin Fahy encourages people to put even a few dollars a week extra into their super funds.

“It’s really important to have income protection insurance which most superannuation funds provide to people when they have breaks,’’ he said.

“It’s a very important safety net.”

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