Beat The 'Baby Debt'

More effort is being made to help women build up their retirement savings after a career break

- Vita Palestrant

Women planning a family can avoid building up a superannuation “baby debt” by taking simple measures to close the gap in their retirement savings. However, many of them miss out because they are unaware of what steps they can take to do so.

The reasons women accumulate less super than men are many and varied: they earn 18% less than men for the same job; they take career breaks to have children; they work part time to accommodate family commitments; and they miss out on promotions and salary increases.

Research conducted by REST, one of Australia’s biggest super funds, found that taking career breaks cost women $159,590 in retirement savings compared with those who took none. Fewer than one in five women made super contributions during their break.

It also showed women earned 29% less than their male counterparts on returning to work (women worked fewer hours after their break). The research’s projections showed women retired with $283,141 less than their male counterparts by the age of 67.

Mary Atley, general manager, brand, marketing and communications, at REST, says that while there are a range of structural issues that contribute to the gender super imbalance, it can be lessened with careful consideration and action.