Women are taking a $160,000 hit to their retirement savings as a result of taking career breaks, potentially exacerbated by the fact they do not seek financial advice, a REST survey has revealed.
The industry super fund released research today that showed women were $159,590 worse off as a result of career breaks.
As a result of this and lower average earnings, women who have taken a career break were predicted to retire with an average superannuation balance of $283,141 less than their male counterparts.
The research, titled “Making a Break”, found women were 30 per cent less likely than men to make any superannuation plans for their career break, despite taking 13 per cent more career breaks by choice.
REST brand, marketing and communications general manager Mary Atley said: “There are a range of structural issues which contribute to the gender super imbalance, but our research shows that the lack of financial planning ahead of a career break is potentially one of the most important factors.
“Nearly $160,000 is a significant hit to a woman’s retirement income – a hit which can be lessened with some careful considerations and actions.”
Furthermore, women who returned to work after a career break earned 29 per cent less than their male counterparts.
The research also found only 6 per cent of women participating in the survey sought professional financial advice before taking a career break and only 16 per cent of women made a superannuation contribution during their break.
Meanwhile, two-thirds of all working Australians took at least one career break at some stage in their working lives, with an average of 3.5 career breaks overall. Health breaks were most common, particularly for men, who typically took a health-related career break at the age of 44.
“When we think about career breaks, we typically think about parental leave or an extended holiday – it is interesting to see the large proportion of working Aussies forced to take breaks due to their health,” Atley said.
“We know health breaks can come out of the blue, but just as many are planned. Among those who took career breaks, the lack of planning for their superannuation is concerning, with only 10 per cent of respondents consulting a financial adviser prior to their break and just 21 per cent making voluntary contributions to their super during that time.”