Steps towards Financial Independence for Women

With so much in the news about the gender pay gap it’s timely for women to look to the future and plan ahead. Australia’s national gender pay gap is 15.3% (Workplace Gender Equality Agency) and 34% of women over 60 are living in poverty (Monash University).

Coupled with the fact that women often take career breaks to raise children and care for elderly parents – it’s easy to see how many women don’t have enough super to fund their retirement. Women often live longer than men which means they need to make less money go further.

Direct Advisers recommend a number of positive steps to secure your financial independence.

• Take action early to avoid financial hardship
  Households often have one partner who takes responsibility for the finances but it’s important for everyone to take an active role and budget accordingly so there are no surprises down the track.
• Superannuation health check
  Do you know how much you have in super? Take a super health check and see if you can afford to make additional contributions or take advantage of the government co-contribution scheme. Direct Advisers can help you put a plan in place to make the most of tax concessions, incentives and rebates.
• Consider income protection
  Single women are more at risk of hardship so consider income protection. Insurance is one of the most neglected aspects of a person’s financial plan, and yet it can be one of the most important. We can help you plan ahead.
• Understand the difference between Salary Packaging and Salary Sacrifice
  Do you work for a not-for-profit? Many of the caring jobs in our community are through not-for profit organisations. Make sure you understand the benefits if your employer offers ‘salary packaging’. Don’t dismiss it as ‘all too hard.’ Get advice.

Suddenly single – Shirley’s story

Shirley and Peter had been married nearly 37 years when Peter died in a car crash. At 62, Shirley was suddenly single and unprepared. Peter had managed their financial affairs, but with his death, Shirley was thrust into a world she knew little about. She was shocked to discover the true extent of their household debt! Shirley knew their home was mortgaged, but had no idea the car was under finance. Nor had she known about Peter’s credit cards – one of which had funded their recent holiday. Under guidance from her adviser, Shirley borrowed against the equity in her home to pay off the car and card debts. She re-negotiated her loan, securing a better interest rate and one payment each month instead of several. Now she could more easily manage her fortnightly income and put money aside for her utility, car and living expenses. Her adviser recommended a one-off post-tax contribution to superannuation. As a low-income earner, she qualified for the government’s co-contribution scheme which paid up to $500 into her super fund. It was a relief for her to know that she could manage her day-to-day affairs while still contributing to her retirement.

Ursula Boorman is an authorised representative of Direct Advisers Pty Ltd, AFSL Licence No 236855 The information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice. *Names have been changed for privacy reasons.