Women and Super Career Breaks - Super Tips

Average lower earnings, breaks from working and longer life expectancy, are just some of the reasons women can be on the back foot when it comes to super. But Rest is here to help change that by giving you the tools and knowledge to help maximise your super at every life stage.

Rest commissioned research*, Making a Break, to better understand the circumstances surrounding Australians taking breaks from their careers and the financial impact this has on their superannuation and retirement.

Our research explores the number and types of career breaks that working Australians take, including the stages of life these occur. Notably, it explores the behaviours of men and women in financially preparing for time off work and the consequences of these actions on their retirement savings.

What did the research tell us?

Two-thirds of working Australians have taken at least one career break at some stage in their working lives, with an average of 3.5 career breaks overall. Health breaks were reported as the most common reason for career breaks, particularly among men, while maternity and leave to care for children were the top reasons for women.

Just 6 per cent of women sought financial advice before taking their career break and less than one in five women made a superannuation contribution during their break.

The research also found that 53% of career breakers did not consider the long term financial impacts of their break.

Forced breaks

2 in 5 (42%) career breaks taken by Australians were forced by circumstance

Savings

By retirement, men have 47% more retirement savings than women (with one career break each)

Financial planning

Women are 30% less likely than men to financially plan for their career break in terms of their superannuation

Career breaks

The average working woman has 4.2 career breaks, costing their retirement balance $159,590^

Health breaks

Health breaks are the most common type of career breaks taken by working Australians (33%)

Returning to work

Women returning to work after a career break earn 29% less than their male counterparts

Leola Rose / The Recover

After 10 years working in corporate marketing, Leola Rose suffered a brain aneurysm at age 28. Leola had to relearn how to walk, talk and care for herself, which left her unable to work for six months. Her employer provided her with income protection insurance during this time, and after receiving medical clearance, she made a successful return to the workforce.

Now aged 36, Leola has made a full recovery, and runs her own business contracting her marketing services out to start-ups. Having relied on income insurance during her unexpected career break, Leola now advocates for planning for the unexpected, and now manages her own superannuation to stay in control of her finances.

*The survey was conducted by Lonergan Research between 4 October and 9 October 2017 of 1,030 Australians (both males and females) who have ever taken a career break of at least three months.

^This is the economically modelled amount of lost superannuation balance of working women at the retirement age of 67 between those taking no career breaks and those taking career breaks, of which they took 4.2 career breaks on average. The calculations are based on self-reported cost per career break; 9.5% compulsory contribution to superannuation is assumed for the entire working life; 15% contribution tax; and superannuation account balance is compounded annually at 4.95% (based on average 10-year rate of return after tax and fees from APRA Annual Fund-level Superannuation Statistics 2016). No voluntary contributions are modelled. The results are on 2017 Australian dollars with no adjustment for inflation

† Rest Advice is provided by Rest Advisers as authorised representatives of Link Advice Pty Ltd ABN 36 105 811 836 AFSL 258145.

Women and super