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  • Nearly $40 billion withdrawn from super funds during COVID
  • Women's super balances remain nearly 20 per cent below men's
  • Super balance disparity starts in late 20s and never recovers

One of the key initiatives during the early days of the Covid pandemic was the opportunity for people to withdraw funds from their superannuation funds.

The scheme allowed people to take up to $20,000 in two withdrawals from their super between April and December 2020.

More than three million people withdrew a collective $37.8 billion through the program across a total of 4.55 million applications.

For some people, having access to these funds may have made the difference between keeping the roof over their heads, and not.

Others decided to just jump on the rare opportunity to withdraw from their super funds before they had retired.

However, new information has come to light that shows that some women – who made up two million of those applicants in the scheme – may have been coerced into dipping into their super funds.

Recent widespread coverage on the matter showed that some women were pressured by abusive partners into taking out superannuation early, with one estimate saying there could be tens of thousands of women affected.

The superannuation sector now wants the government to work out the full extent of the coercion to make sure future policies have sufficient safeguards to protect women.

Super balance disparity

Financial control is one sign of domestic violence, with coercive control being another.

What I find most horrifying about this situation is that women can’t afford to lose any money out of their superannuation – and certainly not tens of thousands of dollars – because they generally have much lower super balances to start off with.

As is outlined in The Female Investor – Creating Wealth, Security, and Freedom Through Property, there is a stark difference in superannuation balances between men and women.

In fact, according to the Australian Government’s Women’s economic security in retirement insight paper (2020), even when women are in their late 20s, their superannuation balances are lower than men’s.

Data from the Australian Tax Office shows that, as of 2016-17, there is a 5.6% gap between men and women’s super balance. This increases to 20.5% for those in the 60-64 age bracket.

The research found that women are on the back foot financially from the beginning of their careers and if they decide to have children, the gap continually widens, and it will keep growing throughout their lives.

By the time a woman retires in Australia, according to the insight paper, her average superannuation account balance is 17.4 per cent lower than a man’s, which reflects an average superannuation account balance of $277,880 for women and $336,360 for men.

Financial independence

The disparity between female and male superannuation balances is unlikely to change in the foreseeable future because of our historic gender roles within society.

Women still generally opt to stay at home once they have children and when they return to the workforce it is often in a part-time or casual capacity for a period of time.

By the time their children have finished primary or high school, it may be too late for them to restart their careers, or they may have missed out on climbing the corporate ladder because of competing work and family obligations.

This is one of the reasons why I’m so passionate about women taking charge of their financial futures and independence so that they have more choices later on in life.

One of the simplest ways to do this is by investing in property – either on their own when they are young, or perhaps when they are in their 40s or 50s when they may find themselves separated or divorced.

Owning an investment property or two (or three!) can make a huge difference to the financial outcomes for women throughout their lives – including not having to rely on a superannuation balance that is unlikely to provide them with enough funds to thoroughly enjoy their twilight years.

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Disclaimer: This article contains general information and should at no time be considered financial advice to the reader. The reader should always verify their situation with their financial advisors before taken any further steps. 

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