Gender-based gaps are so normalised in the developed world, we are almost immune to the shock of data that shows some women – who statistically speaking live longer than men – are actually facing poverty in retirement because of the state of their savings.
On average, women end up with around $150,000 less in superannuation upon retirement than men. According to ASFA’s research, average super balances at retirement today are $138,150 for women compared with $292,500 for men.
To create the right fixes, we need to be clear about what overwhelmingly contributes to these figures – the structural inequities that mean, on average, women earn substantially less than men in like-for-like roles. This is based on indisputable ATO data.
Women are also not afforded the luxury from a government policy perspective or from an Australian business culture perspective of having a family without it significantly disrupting their career. There are exceptions, many in the SMSF and accounting professions are, but this is the rule. Again, hard facts, not hysteria or bias, inform this view. The latest figures from the Australian Institute of Company Directors show that only 25.4 per cent of directors across the ASX 200 are female.
Armed with those facts, and immeasurable anecdotal evidence, I fundamentally reject any suggestion that Australian women are in this position because of their own knowledge level, capacity to save or a lack of desire for financial independence. In short: women in 2017 know they need money. Financial co-dependence is a problem for women overwhelmingly because of structural inequities, not because their attitudes created this situation.
Yes, engagement, particularly with superannuation, is a problem. This is a pervasive national issue for men and women alike.
Yes, women have historically not been the keeper of household finances, and may lack experience on this front. No doubt this is still the case for a lot of clients. First, that is changing – for example, NAB recently found women make the lead decision in purchasing a property in 91 per cent of cases. Also, many of you joke about clients needing to run a financial decision past “the boss” – in reference to a wife or female partner. Jokes are only funny when they’re true.
Still, much of the material created to address the gender savings gap is focused on correcting women’s attitudes to money. We can’t create the right products, implement the right strategies, and get those superannuation balances boosted for women if we are dealing with the wrong problems.
I see well-meaning examples of this everywhere. With that in mind, I recently got in touch with FPA chief executive Dante De Gori about one of the FPA’s articles which pedalled some problematic messages. To his and the FPA’s credit, the article was amended following my email, and Mr De Gori has agreed to chat further about the issue with me.
The introduction to this article reads: “Divorce is the leading cause of financial hardship for women. So it’s important to take control of your money and plan for a time when you may become financially independent.” You realise how deeply stereotyped optional independence for women is when you reverse the genders in that statement. In this context, you would simply never read that statement about a man.
Most importantly, the article also had “a man is not a financial plan” in its headline. Here’s what I said to Mr De Gori about that:
“It’s well intended and great to see associations backing female participation in wealth planning.
“However, it also shows adherence to a pervasive and flawed view of what is motivating the savings gap.
“Financial literacy might be an issue for a mass consumer audience – i.e. members’ clients – but there is no compelling evidence to suggest that it is the primary motivator of the wealth gap.
“A financially illiterate man is still statistically ahead in earning capacity to a woman in the same position.”
Most professionals and leaders in this industry are well meaning, and my correspondence with the FPA confirms the good intentions of its leader. But in 2017, when women in a developed country can’t independently sustain a basic retirement, it’s not the answer.
This is an issue with deep roots that requires more understanding than most in financial services and professional services realise. We can’t create the right solutions and tailored advice services if we are giving a disproportionate level of attention to the wrong offenders.
By and large, the advice and accounting professions mean well.
Let’s get this right.
Katarina Taurian is managing editor, SMSF and accounting, at Momentum Media, publisher of ifa.
All the content of this article is virtue signalling It really gets my goat up when the author writes this stuff but does absolutely nothing to assist this perceived problem . O Yer so what should she write abut I hear the critics say . Well lets start with some properly researched articles on the implications to retirement savings with the new insane laws Morrison and Turnbull have brought in . Especially the real implications on lowering the contribution cap . O that may take some real work I hear the critics say….
Just to stir the pot, in a constructive way I hope.
How many men feel inclined to work back the extra hours?
Are women more likely to leave work early to pick up the kids from school, or stay home when the little one is sick, etc?
Is this an employer problem? Or is it a problem with the couple, i.e. is the mother inadvertently carrying this responsibility?
If the mother is carrying the responsibility, to what extend does this affect work income?
Let’s take a straw poll. I’m genuinely curious.
From personal experience, as a male, I once decided to take 1 day off per week for 4 weeks, when my newborn came along. My employer decided to implement changes to my role on the 1 day per week that I was off. No doubt as the sole income earner of a growing family, I was concerned with the implications. This was at a large corporate that advertises it’s ‘workplace flexibility’. In hindsight, I survived the process rather well, but still at the time…..
Sorry, what does this rambling post have to do with gender superannuation imbalances? That’s kinda the topic here.
Rambling??
The article insinuates that women get paid less than men.
My post asks the question – is that because women are expected to carry the heavier load of ‘family duties’ and if so, where does the fault lie? The employer, or the family unit?
Not rambling at all. Most individuals work as part of a family unit after all. Quite central I would’ve thought.
The article doesn’t ‘insinuate’ that at all actually, it states that as a fact “women earn substantially less than men in like-for-like roles”. So your question now (after 5 questions in post 1 above including one about working back extra hours and then a personal and slightly endearing narrative about your job) is; Do family duties mean women have less super and whose fault is that? That right?
“on average, women earn substantially less than men in like-for-like roles. This is based on indisputable ATO data.”
Katrina, can you provide the relevant references for this statement? I’m curious given that comparison of earnings on a true like for like basis has proved very difficult for many studies, in fact, the most widely quoted (and misquoted) reports on gender pay gaps from the WEGA specifically state (in the finest of print) that the data is not complied on a like for like role, seniority or hours worked basis, much of the data isn’t even on a like for like industry basis.
Of course she can’t. Simple question for her though. If I were employing someone, and I narrowed down the candidates to one male and one female, they both have the same skills, experience and ability to do the job, yet the female can be employed for less than the male, why would I ever employ the male?
Based on the quality of that post and seemingly unburdened by the cumbersome weight of a powerful intellect, the more relevant question is; Why would anyone want to work for you?
hilarious, very good…but he or she has a point.
There is near parity in pay in like-for-like roles. This is statistically proven and has been various times. A wage gap exists only when considering roles in the same industry (but not the same role) and not considering hours worked. Women gravitate to more flexible working arrangements in an industry which are obviously lower paid. The ‘pay gap’ will always exist while women take time off for children at such a crucial time of their working career just like I was put back years when I took time off to travel and missed that promotion. The workplace gender equality agency addresses all of this in their annual report, the pay gap in the exact same role and hours worked is a myth.
This is a curiously presented piece. We know there is a gap in super balances as a starting point. Even if we addressed gender income inequality then women who choose to have a family, and take time out of the workforce, would still have less super with those fewer years of service. Then we have divorce and property settlements where typically the home goes to one party and the majority of the super goes to another – which is just a practical outcome (NB ABS data tells us home ownership is higher for women). Then there are couples who favour, what might now be regarded now as quaint, fairly traditional roles and women will then have less super than men – quite voluntarily by arrangement with their partner.Then we have the traditional “risky” jobs (offshore drilling as a simple example) where the pay has been high in the past and men have filled most of those roles – and again here women will have less super unless participation in those roles increased. So I’m not sure this issue is as homogenous as you make it appear to be for women.
There are good girls. There are good boys. There are bad girls. There are bad boys.
The real problem with the world is the good girls like the bad boys, and the bad girls have bad agendas for the good boys.
A man is not a plan hey? Look me in the face and honestly say that a woman can meet a stranger who has spent a lifetime building assets, swan in, marry him, have two or three kids and walk out 3 or 4 years later stripping him of 70% of his assets and 35% of his income for 13 years. Yeah sure, a man is not a plan but plan you will when you realise this fact. It’s the silent inconvenient truth. Men get shafted…..fact. Women can set themselves up for life doing the above and still enjoy their kids and life. Don’t play the female victim card ladies, it’s insulting.
I shudder to think that there are individuals in our industry who share the opinion of Steven’s – not merely because it goes so completely against what I believe, but because it’s so undeniably false that it’s laughable.
It’s 2017 – do people who honestly think like this still exist?
If we want to talk about silent inconvenient truths, I think the best place to start would be the gender wage gap, sexual harassment in the workplace, discrepancies in super balances between men and women due to time taken off work to care for children (you know – the ones you mentioned we get to enjoy once we are done taking a guy for all he’s worth) or why there is a lack of female representation on boards.
But no worries – men get shafted, right? Right?!?
Great article Katarina. Love your work.
Sadly I’ve a client in that very situation.
I guess in 2017 Anon, people do still think like this becoz it happens, and obviously happened to Steven hence his bitterness. That doesnt mean that the things you have listed dont occur and arent an issue. Like all things, its about balance and the truth between any two extremes will lie somewhere in the middle.
Just because these things happen sometimes doesn’t make them the rule. Steven’s comment was not made to show that there are two sides to the discussion or to bring balance to the argument- his aim was to obliterate one side in favour of his own. He addressed an entire gender, based on an anecdote in order to shut down an opinion aimed to bring equality to both genders.
Luckily, it hasn’t happened to me YET. It has happened to many of my friends, many of my clients and countless friends older children. I’m sorry, but it is not good enough you post how tolerant you are by supporting PC issues. Pull your head out of the sand and realise what is happening out there to men and the total injustice that occurs in nearly every separation and the poor bloke is left financially destroyed for simply marrying someone and having kids. It’s a disgrace. So I’d like “balance” included in these women are so hard done by articles and some truth reported.
Okay, I’ll bite.
And I’ll pull my head out of the sand long enough to say this.
When I was 12 my parents separated.
My dad refused to leave the family home, so my mother and three kids moved into a women’s refuge. We stayed there for six months, 4 of us in one room until we were found housing.
It took approximately a decade for my father to even contemplate a property settlement, of which my mother (although being the sole carer of his children – he didn’t pay child support nor want visitation rights) was given a fraction.
My father still lives alone in our family home today – 5 bedroom home in an affluent suburb for one hell of a greedy guy.
My mother and us were by far worse off financially.
Why do I tell this story?
Because if I formed my opinion on all men based on my experiences, it would be extremely poor.
I would challenge you to not form your own opinion of all women, based on a couple of anecdotes from friends.
Let’s contribute to solution and to unity, not division.
Yep that’s an admirable outlook and mature sentiment having come from that background.
Your situation happens yes but it would be a fractional occurrence. Like 3% if that. Most would still go through what you described but the family courts would of ripped 70% of the house equity, 70% of his super and other cash assets, given your Mum his car and all his furniture except a
bed and docked 40% of his income for a decade or more. Great gig and results for the ladies. Never a good outcome for the man. Your mum needs a good lawyer. Even now she will win.
“discrepancies in super balances between men and women due to time taken off work to care for children”
For which the women in question are now entitled to a portion of her (still working) spouses assets and income. Thus comparing the total of just a single asset type for a single member of a family asset pool is both statistically wrong and frankly, intellectually bankrupt.
For participants in the financial services industry it is beyond distributing that many lack that ability to interpret, discuss or contextualise basic statistics.