Our new article relates to a woman’s worth and the practical actions required to improve a woman’s financial security to ensure financial independence.
It is easy to ensure that your superannuation is working hard. Discuss with you planner once a year how it is going. If you don’t have a planner then get one, and OFP are very happy to assist you in that regard. Commit the time and you will be very well served. It is easy to say that the adviser should call you and they should however a good advice relationship has an interactive dynamic. Given a lot of your input the results will reflect what you want not what someone else dictates for you. The current Government is bringing in My Super so that Your Super can be Their super.
Use your time to retirement to grow your assets as time is the most valuable asset you have. Don’t wait until close to retirement to start thinking about it as your greatest asset will be gone. The longer your money is invested the less you need to contribute or the greater the balance you will have.
Allowing for the point above why contribute less ? Contribute more in the early years to build your balance and allow time and compounding interest work their magic for you.
Everything in the future is dependent on your good health and income earning capacity so consider protecting that as part of your plan and you will have all your bases covered.
It is your super, your lifestyle and your retirement. Take some time to set yourself up for life and you will never look back. The sooner you start the better your outcome. It is never too early to start planning. I hope you enjoy the article. Regards Andrew
An article prepared by Infocus Money Management for our the Spring Edition of our magazine Newsfocus.
A Woman’s Worth
Australian women are still markedly financially worse off than men, despite increasing earning capacity, spending power and financial responsibility. It’s a long road to true equality but there are steps you can take now to generate more wealth and protect your future.
On average, women earn less than men. In 2010, it was reported that there was an estimated 17% pay gap between men and women, a difference that equals $224 a week1. Women are also more vulnerable to poverty when it comes to retirement. The average superannuation balance held by women at $92,000 is 40% below the average held by men ($154,000)2. Life insurance is another area where women are more exposed to risk, with research suggesting that significantly fewer women than men take out cover3.
Why is this occurring? How is it that women, who now represent 45% of the Australian workforce4, are under-paid, under-resourced for retirement and under-insured?
The reasons are numerous and complex, and are a cumulative product of decisions, events and experiences over a woman’s life.
Grouping of women and men in occupations and industries is further entrenching the wage gap. Many jobs are considered “women’s jobs” and are not as highly paid. Ingrained attitudes to women in the workforce still exist, creating barriers to senior roles and equal pay. This, coupled with the perception and often reality of women as carers, places restrictions on women’s ability to earn and save over their lifetime.
Although remarkable change has occurred and continues to occur, society still has a long way to go before we fully address the inequality experienced by women. This means that women need to be proactive about growing, managing and protecting their wealth.
The three pillars of a wealth accumulation and protection strategy:
Make your money work hard
If you haven’t already, consider pursuing a long-term investment strategy that makes your money work hard for you. You may choose to invest in capital growth options such as shares, property or anything that may increase in value, or you may want to generate income through rental or investment properties or other income producing investments.
Think about your retirement
Although women have an almost equal presence in the workforce, they typically move in and out of the workplace or take part-time positions due to carer responsibilities. Less time in the workforce means less opportunity to accrue savings and superannuation. With women living longer and earning less than men on average, they are often more financially vulnerable when they retire. Think about the real cost of your lifestyle and consider how much money you will need to retire and how to achieve this figure. Salary sacrifice, personal contributions and a range of other strategies can help you maximise your retirement contributions. These strategies may not suit all women which is why you should discuss your personal situation with a financial adviser.
Protect your wealth
It’s fair to say that women are equally as likely to suffer from injury, illness or death as men – yet nowhere near as many women are choosing to protect what’s important to them with life insurance cover. Life Insurer TAL’s 2011 claims statistics highlight this inadequacy, showing that women only account for 21% of all claims across their insurance products. A 2008 study of the life insurance industry by the Financial Services Council indicates that this figure is consistent across the industry3.
Many women underestimate their contribution to their household and what would happen if they were injured, ill or passed away. If you are a dual income family, your family is partly dependent on your income. If you are the breadwinner, your loss of income could be devastating. If you are a stay-at-home mum, how much would your family need to pay in medical costs, childcare and to maintain your household? If you are working and single, how much would you need to maintain your investments and lifestyle, as well as meet the daily costs of living?
Using a combination of four basic types of cover, you can effectively protect your financial future against these risks:
- Income protection insurance to provide a replacement monthly income if you are temporarily sick or injured.
- Critical illness insurance to provide a lump sum of cash if you are diagnosed with one of many specified medical conditions, such as cancer, multiple sclerosis and heart attack.
- Total and permanent disability insurance to provide a lump sum of cash if you become totally disabled and are unable to work ever again.
- Life insurance to provide a lump sum of cash upon death or terminal illness.
Speak to your financial planner
To discuss a tailored wealth accumulation and protection strategy that positions you for the future, speak with Andrew O’Neil from O’Neil Financial Planning. Call our office today on 08 9240 5370
Source: TAL Limited 1. The Impact of a Sustained Gender Pay Gap on the Economy – NATSEM 2. Roy Morgan ‘Superannuation and Wealth Management in Australia’ Report 3. Investment and Financial Services Association (IFSA) survey of Australian life insurance companies, 2008 4. ABS, Cat. 6202.0, Labour Force, Australia, January 2011 Source: Table 02, Labour Force Status by Sex – Seasonally Adjusted http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Jan%202011?OpenDocument This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Infocus Securities Australia Pty Ltd strongly suggests that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission. Andrew O’Neil is an Authorised Representative and Adon Nominees Pty Ltd ABN 15 063 402 513 ATF O’Neil Financial Services Trust t/as O’Neil Financial Planning is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523