Superannuation not so super for women alone

This is a story about why after 20 years of compulsory superannuation payments, many older women without partners, will be forced to live on the age pension of about $344.00 per week.

Life expectancy for Australian men is now 84 years of age and 88 years for women. So, if a woman living alone is planning to retire at 65, her retirement savings may need to last more than 20 years.

For those at retirement, average superannuation payouts in 2009-10 were $155,000 for men and $73,000 for women. This is nowhere near enough for single, divorced or bereaved women, as they must pay higher living costs for goods and services compared to couples.

It is astounding to think that the OECD considers the poverty line in Australia at an income of about $32,000, while many women without partners can expect to survive on the age pension, which for a single person is about $18,000 per annum.

It is also galling that some commentators in the superannuation industry believe that a woman can survive on $18,000 per annum because 'they are used to it'.

A single, divorced or bereaved woman who 'retires' at the age of 65 - assuming part receipt of the Age Pension – will require a lump sum at retirement of between $400,000-$500,000 contingent on life wants and needs. I'm presuming reasonably frugal expenses.

The level of retirement savings accumulated through superannuation is dependent on two key factors: participation in the paid workforce and lifetime earnings.

For working single women, lifetime earnings are shaped by experiences, decisions and events at a number of critical points across the lifecycle. Fate is not democratic and every woman's work and life cycle is unique.

The reasons for a single, divorced or bereaved woman's low superannuation balances are manifold but includes her level of education, career choices, pregnancy, caring for children, re-entry to the workforce, caring for elderly relatives, domestic and family violence and divorce or separation.

Other factors include whether she owns her own home or is renting, her levels of debt, health and care expenses and whether she lives with extended family.

Women who are marginalised due to their race, disability, age, sexuality and socio-economic status, experience additional barriers to workforce participation. This affects their employment rates and earnings, and consequently, their retirement savings.

According to the Australian Bureau of Statistics (2006), women's superannuation balances as a proportion of men's balances decrease from 71.1% (25-34 age bracket) to 46.1% (60-64 age bracket). These figures are set out in table below.