International Women’s Day (8 March) is a global day to champion women’s rights and celebrate women, in all their diversities. The 2021 theme #ChooseToChallenge is a call to challenge and call out gender bias and inequality. From challenge comes change and we invite Sangeeta Venkatesan, Executive Chairman of FairVine Super, a fund designed by and for women, to share her thoughts on women’s challenges saving for retirement and how we can drive change.
Longer life and lower retirement savings are pushing women to the brink of poverty
Australian women tend to live longer than men yet accumulate less wealth to fund their longer lives. Many fear they will run out of money if they do live long. These fears are not unwarranted. The foundation of saving for retirement hasn’t changed to support the 100-year life.
Driving this fact further, is the alarming findings that on average, a woman will have higher health costs than the average man in retirement. This is because women retire earlier, live longer and are more likely to spend years alone and need to rely on formal long-term care in their later years. Another financial challenge women need to plan for.
“Women earn less and often outlive their partners, so they save less, and it’s doing them a massive disservice when it comes to retirement.” Sangeeta Venkatesan
The gender super gap in Australia is well documented.
Our contributory retirement income system means those who save more and accumulate greater assets have higher incomes in retirement.
Since women historically tended to earn less than men over their working lives, they accumulate fewer retirement savings and receive significantly lower incomes in retirement than men.
Older single women over the age of 55 are becoming the fastest growing homeless population. There is no sugar coating this fact and clearly, the superannuation system is not geared towards supporting Australian women in their later years.
Women have different needs.
In addition to now being the largest contributors to the gig-economy, women have sporadic or non-linear career trajectories due to family commitments which means they have less savings and tend to live longer, which means they need more.
All of this directly conspires against a woman’s earning and saving potential, and the impact can be devastating. You only need to look at the median superannuation balance for 55 – 64 year olds, which is $183,000 for men and only $119,000 for women[1].
The implications of this go beyond the ethics of gender equality. It’s resulting in older women suffering extreme financial hardship. It’s scary and heartbreaking that older women are out of options and turning to the streets.
This could happen to your mother, your aunt, yourself, indeed any woman who, despite having spent her entire working life taking care of her family, finds herself with inadequate funds to support herself in retirement.
The system is clearly broken.
The one-size-fits-all approach to financial services doesn’t work, and women, in particular, are suffering the consequences. It’s incumbent on financial institutions to offer products and tools that help to address the gender wealth imbalance. And this is more than just using pretty pastel colours and pictures of happy women running through meadows. We need real solutions that can actually change the wealth outcomes of women for the better.
Anything short of that is mere lip service.
Sangeeta Venkatesan, Executive Chairman of FairVine Super
#ChooseToChallenge #IWD2021
[1] ABS Gender Indicators, Australia, December 2020