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Aussie mums taking a $283k super hit: Super Fierce data

Aussie mums taking a $283k super hit: Super Fierce data

SYDNEY, Sept. 23, 2022 /PRNewswire/ — Wealthtech social enterprise platform Super Fierce has calculated that the average Australian woman who chooses to become a mother will face a $283,000 (present day value) hit to her superannuation savings by the point of retirement.

Productivity Commission data states the average Australian mother has a median of 2 children within 5 years; takes 32 weeks’ full-time maternity leave for each child; and returns to an average of 3.5 days’ work per week until the youngest is 18 years old. Australian Institute of Health & Welfare (AIHW) data states the average Australian mother has her first baby at 29.4 years.

Based on these averages, Super Fierce calculated that until children reach 5 years of age, reduced work hours results in around $8,000 per annum less Compulsory Superannuation Guarantee contributions, adding up to $44,000 post-tax.

The loss of earnings trajectory for this average mother versus her peers who didn’t take time-out (9 percent for two children) reduces contributions by $90,000 over the following 30 years of work, while reduced work hours after children are over 5 years of age has an additional $56,000 cumulative impact.

Finally, the compounding impact of the combined $190,000 ($44,000 + $90,000 + $56,000) then also not earning investment returns in super means an extra $93,000 lost.

This adds up to a staggering $283,000 in total lost super savingsbefore accounting for the current gender pay gap because the analysis only looks at the penalty for mothers versus non-parent women.

But Super Fierce founder & CEO, Trenna Probert, believes there are ways to address the imbalance.

According to Trenna Probert: “The figures may appear bleak, but our calculations show that if a woman switches to the lowest-cost super fund at the average age women have their first child, 29.4 years, then she could save around $239,486 in super fees over her lifetime. That’s an extra $343.57 in her pocket each week once she retires, or an extra $50 a day.

“In addition to this, we also recommend a new type of ‘push present’: a contribution to a woman’s super by her partner when they decide to have children together.

“Children don’t just happen to women. Most often the choice to have children is a joint one, so it doesn’t make sense that women disproportionately bear the financial burden, on top of the physical burden and impact on their general independence.

“So instead of flowers, soft toys, and spa vouchers we never get to use, push up the value of a mother’s superannuation. A top-up of around $10,000, in combination with switching to a lower fee fund, could help to reduce the super penalty facing new mothers to nil.”

Case Study

Trenna Probert founded Super Fierce after her own lived experience of financial hardship.

She was forced to borrow $3k from her parents to leave a relationship with her 18-month-old son and start all over again, despite a prior high-flying career. Some nights she literally couldn’t afford to feed her son.

But Trenna slowly rebuilt her confidence, career, and finances. Three decades after they met working as golf caddies in Japan, she married Craig Swanger, now her Super Fierce co-founder, bringing together three young children into a blended family. 

Craig Swanger, Kit Probert, and Trenna Probert
Craig Swanger, Kit Probert, and Trenna Probert

When they became pregnant with their son Kit (who is now nine years old), Craig recognised the disparities women face when it comes to super. He stepped in and made regular contributions to Trenna’s beneficiary account until their joint SMSF reached 50/50.

According to Craig Swanger: “The gender retirement gap is caused by two fundamental issues: the gender pay gap and the role of women as carers. The gender pay gap will take too long to fix for my daughter, and sadly even for her daughters. But understanding how the super system works means that today’s working women can help to reverse the financial impacts of their role as carers. As a father and husband, I absolutely wanted to play my role in contributing to reducing the disparity too.”

Trenna Probert adds: “The positive impact of Craig’s decision on my sense of confidence and well-being, especially after some tough years as a single Mum, is impossible to quantify. I would never have imagined a money decision could draw us closer together emotionally, but it did and has a lasting impact. I feel seen, valued, and respected.”

Super Fierce (www.superfierce.com.au) is a wealth advice platform and social enterprise that helps women close the gender wealth and retirement gap. It provides a scalable advice platform that compares 500+ super funds and assists in switching to save fees and maximise returns.

This is critical as the average Aussie woman could save around $100k over their working life just by cutting pointless super fees.

Super Fierce also runs Fierce Impact, which aims to donate $100 million to Australian women living at the margins of society by helping 1 million women to save on super. For every person that uses Super Fierce to switch, $100 is donated.