Podcast

Michelle: Women are retiring with less super, but a few small choices can help change that. In this episode, you'll hear about the key moments that can make a difference.

Shane: Hello. My name is Shane Hancock, and I am the General Manager, Retirement at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives. You should assess your own financial situation and needs. Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I, and AustralianSuper, acknowledges the traditional custodians of country throughout Australia. We pay our respects to Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people.

It's International Women's Day in March and while progress is real, the gender super gap still means too many women retire with less and need it to last longer. Today, we're mapping the moments that count across a working life and the small moves that can make a big difference. Whether you're just starting out, making a career pivot or approaching retirement, this episode is for you.

To discuss this very important topic, I'm pleased to be joined by Michelle Kelada who is an Education Manager at AustralianSuper. Welcome, Michelle, and thanks for joining us.

Michelle: Thanks, Shane. It's great to be back on the podcast.

Shane: Okay, so I've used a term in the introduction which is gender super gap. Can you explain what that is for our listeners?

Michelle: For sure. So, this is the gap between the average super balance of a man and woman at retirement. So the super gender gap tells us that women are retiring with less superannuation than men and there are a few key reasons for this. And the first one is the gender pay gap.

So, on average, women earn less than men and because compulsory employer contributions are based on a percentage of someone's employment income - this means women generally accumulate less super over their working life. The other reason is part-time and casual work. We know that women are more likely to be in part-time or casual employment over the course of their lives, which again can impact compulsory employer contributions or even what they may be able to afford to put into super themselves.

And the final reason is time out of the workforce. A woman's working life may be interrupted by parental leave and time off to raise their family as well as taking time off to care for elderly family members, which can have the same effect.

Shane: So, Michelle, we've talked about what the gap is, but for women starting out, what are two or three small super moves that matter most to make an impact?

Michelle: The first small move is just engaging with your super from early on. When you're young, super isn't usually a top priority, but setting up your account properly and checking in on it regularly can help you get off to a good start. Once your account is set up correctly, it doesn't stop there, you want to be checking your account to make sure you are receiving contributions. Most super funds have an app that make this really simple to do.

The next is checking your investment option. When you join a super fund, if you don't make an active investment choice, most people will default into an investment which may or may not be the right option for them. So, making sure it meets your needs, given that most of those just starting out tend to have a long investment horizon, is an important step. And then finally, consider making a small voluntary contribution if you can. The power of compounding returns over your working life means a small contribution now could have a big impact on your future savings, and a little bit could go a really long way.

Shane: Thanks Michelle. So, at the beginning, we talked about one of the key reasons for the super gap is time out of the workforce for women. Can you help our listeners plan for those events?

Michelle: So, we know why we've got this gender super gap, and we've spoken about those points already. And one important recent change is that from 1 July 2025, the Australian government is paying a 12% superannuation contribution on its government-paid parental leave, and this is paid directly into your super fund after the financial year.

This is a really great step towards closing the gender super gap for those that are taking time out of the workforce. You might also consider what's called spouse contributions, so if you have a partner who will continue to work, you may be able to grow your super balance with after-tax contributions from your spouse into your super. It does depend on your income and there are eligibility criteria to be aware of, but if these are met, your spouse could be eligible for a tax offset.

Another one that you might want to check your eligibility for is what's called the government co-contribution. This one is again tied to earnings and eligibility criteria do apply and essentially the Australian government makes super co-contributions to help low and middle income earners boost their retirement savings.

So, if you are on parental leave, you're probably earning less than what you normally would and if you meet the eligibility criteria, this could be a good option for you to consider, remembering that you do need to make an after-tax contribution into your super to be eligible for the co-contribution from the government.

Shane: So, Michelle, life happens, people change jobs, go to part-time work, marriage separations, what are some key super steps for people to take in those situations?

Michelle: So, in any big life shift, there are three things that you could do and we've touched a little bit on this already. Keep track of your account, check your contributions and update what's changed with your super fund. These small check-ins help your super to stay on track. If you have insurance inside your super, you do also want to check that this still meets your needs.

Earlier we spoke about setting up your investment option correctly and if your situation has changed, it's also a good idea to make sure that your investment option still suits your investment goals. Consider if you can add a little extra to your super and if your employment, income or relationship status changes, review and update your super details, including things like your beneficiary nominations.

Shane: So Michelle, we all know superannuation's primary purpose is to help someone fund their retirement. So, for women who are approaching retirement, what are some steps they can take?

Michelle: Firstly, don't be disheartened if your super isn't something you've paid a lot of attention to in the past. It's never too late to start planning. One of the things you might want to consider doing is using a tool like our super projection calculator. This can help you see how your super is tracking and what your retirement might look like, and help you to set realistic goals now which could make it easier to make informed decisions for your future.

Finally, you might consider getting trusted financial advice. Retirement planning can be complex, and the right advice can help you make informed decisions and feel more confident about what your retirement and future might look like.

Shane: So Michelle, thank you. We've covered a lot of actions today, so we'll include a link to those actions that we've spoken about in the show notes. For more resources, visit australiansuper.com/women, which will have a whole range of information that we've covered today. So Michelle, really important topic. Again, you've explained it really well, so thank you.

Michelle: Thanks Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.

Shane: Hello. My name is Shane Hancock, and I am the General Manager, Retirement at AustralianSuper. And welcome to our podcast, The moments that count. Before we start, it's important to note that the information discussed in this podcast is general only and doesn't take into account your needs or personal objectives. You should assess your own financial situation and needs. Investment returns are not guaranteed. Past performance isn't a reliable indicator of future returns.

Today, this podcast is being recorded at our head office on the land of the Wurundjeri people of the Kulin Nation. I and AustralianSuper acknowledges the traditional custodians of country throughout Australia. We pay our respects to elders past and present and extend that respect to all Aboriginal and Torres Strait Islander people.

When it comes to super, it's not just about what you earn, it's what you keep that counts. Today we're unpacking the topic of net benefit, why it’s important and what it means for your super. Small differences sustained over time can quietly add up to big outcomes. To help explain this topic, there is no better person than Peter Treseder. Peter has been educating AustralianSuper members for over 20 years on the nuts and bolts of superannuation. Welcome, Peter and thanks for joining us.

Peter: Thanks for the invite, Shane. It's always good to talk about topics that are important to members.

Shane: Peter, can you explain what net benefit is, how it differs from investment returns and how it can impact someone's balance?

Peter: Net benefit is the number that really matters, Shane, when it comes to assessing how your fund's performing. It's long-term investment returns, a growing balance, insurance and other benefits are important, but it's the net benefit that shows the true value of a super fund. So net benefit is the investment return delivered to you by your super fund minus the administration and investment fees and costs, transaction costs and of course tax.

There are a few things that can have an influence on someone's super balance. Investment returns is one factor. At the end of the day, when you look at your super balance at retirement, the majority of your money has come from investment earnings, not what's gone in. But it's also important to consider the fees and costs you pay. It's the cost of investment fees, administration costs, the cost of insurance, tax, all that is money coming out, which leaves less money in your account to grow.

Super funds charge these fees to cover the cost of managing your super and investments, as well as providing other services that you receive as a member of that fund. The fee and how it's paid can differ. So in the end, it is the investment earnings, less costs, that gives you that net benefit. So, it's important to understand what those costs are that are coming out of your account.

Shane: Thanks Pete. So, it's important for members to understand that they're in a good performing fund and a fund that has appropriate fees that will give them that right balance at the end of the day.

Peter: That's right, and it's engaging with your super to find out what those fees are, what those costs are, and how you can potentially reduce them.

Shane: How do these small differences over time make a difference to your retirement, Pete?

Peter: It's the power of compounding interest. So, compounding is the important part of investing. In relation to your super, compounding is the investment return generated on the returns you've already earned. So, it's a bit like rolling a snowball down a hill. I don't know the physics of it, but as I roll the snowball down the hill, it gets bigger and bigger. That's what your fund is doing.

That's what your account is doing with compounding interest. So, lower fees, the more of your earnings that stay in your account and are reinvested, will increase that compounding effect.

Shane: So, you've talked a bit about investing your superannuation. Obviously everyone's superannuation is invested and there's different ways in which that money can be invested. Can you tell us a bit about the consideration in someone's investment and what are the options they have?

Peter: If you want to take a more active role, which a lot of people are now doing, more people are making investment choices. Sometimes when it comes to making a choice, members don't know what their risk profile is. So, we do have an investment risk profile tool on our website that can help members understand what their risk profile is and which investment options we have may best match up with their profile.

Shane: Thanks Pete. We often talk to members and refer the fact that superannuation is everyone's own investment, so you wouldn't forget about the money that's going into your bank account every month from your employer, so therefore you should take some interest in your superannuation.

In most cases, people are getting 12% of their salary going into superannuation, so it's a significant amount of money. We've covered a lot of considerations today. Can you give listeners a quick checklist on things they should consider when managing their superannuation?

Peter: The main one is, as you just alluded to there Shane, you've got 12% on top of your salary going into this thing called super. If you had 12% on top of your salary going into a bank account, you'd be all over it. So, engage with your super, understand what your super is, how it's growing, that you are receiving that 12% that you're eligible for, and then once you've engaged, you can take that next step and look at reviewing your investment options.

Is the option you've got the one that suits you best? Is the insurance cover you've got appropriate for your needs? AustralianSuper has a number of different work ratings, which is an influence on what the cost of insurance is. Have you made sure you've got the right work rating? You could also look at adding extra into your super. The more you put in, generally the more you take out.

But when it comes to getting money into super, you've got to choose the method that is going to be most effective for you. And again, it comes back to the more you've got in your account, the more it's going to earn. The less you're paying, the more it's going to earn. And finally, we're seeing a great uptake of the AustralianSuper app.

Having the power to engage with your super in the palm of your hand, members can see what their account's doing, and the convenience of having it to look at every day, if you're that engaged with your super, is there by downloading the AustralianSuper app.

Shane: Fantastic. Thanks, Pete. I think particularly the comments around reviewing your investment options, looking at your insurance, your work ratings that you talk about. So, in effect, if you're employed in an office, but your work rating might be blue collar, so you might be paying more insurance premiums than you should, or adding to your superannuation. And there are a range of different tools available through our website. So I'd encourage anyone who's not sure where to start, start with the website or give us a call to talk through how we can help you out with your superannuation and tailoring it to your needs.

Thanks for joining us today, Pete. As usual, you've taken a slightly confusing topic and made it very understandable for our listeners. So, thanks for joining us.

Peter: No worries, Shane.

Shane: Thank you for joining us today. If you're an AustralianSuper member and you would like to join us to share your story or have a question or topic you would like us to cover, then click the link in our show notes to get in touch. If you've enjoyed this podcast, subscribe and share with your friends and family. See you next time.