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Individual Superannuation Balances

Individual Superannuation Balances are Irrelevant

Scare Mongering Women’s Super

A recent news article led with: Women retire with half the savings [1] in superannuation than men. The article showed real life examples of couples with significantly different super balances and blamed the gender pay gap, the rise of the gig economy and the fact that in most families women are the primary carers of children for the imbalance in superannuation. There is no denying all these factors contribute to women having lower superannuation balances at retirement. However, looking solely at the divide between the super balances of men and women is too simplistic a view. It distorts the facts and looks at men and women as silos, in competition with each other. It doesn’t look at realities of life, that Australian couples work as teams and therefore individual superannuation balances are irrelevant.

Couples in financially co-dependent relationships are a team. They work together for common goals, such as going on holidays, buying a home or raising a family and will allocate their financial resources to meet these goals. Around the ‘raising a family’ milestone, one partner usually becomes the primary income earner and the other the primary carer. Regardless of who earns the money, all funds are pooled to support the (growing) family. It is common in families for the primary carer to never return to full time work and are therefore often supported financially by the primary income earner in the long term. It is the total income of the couple or family unit that determines if the family financially sinks or swims. Likewise, in retirement individual superannuation balances are irrelevant. It is the couple’s combined asset value that determines their quality of life in retirement.

For example:
For a couple in a financially co-dependent relationship at retirement, if the primary carer retires with $150,000 in super and the primary income earner has $700,000 in super, the couple still have a total of $850,000 to fund their combined retirement. This provides them with approximately $59,979 per year using the retirement planner calculator [2]. According to the ASFA a couple needs [3] $39,442 p.a. for a modest lifestyle and $60,604 p.a. for a comfortable lifestyle. This couple, regardless of one of them having as low super balance, would have what would be deemed a comfortable lifestyle in retirement.

If their relationship dissolves, then there would be a property settlement between the two parties. This would either be agreed to by the two parties or forced by the court. Either way, the most likely outcome is for a 50/50 split of assets, meaning the primary carer would leave the union with the same amount of money as the primary income earner. The ASFA [4] deems that a single person needs $27,425 p.a. for a modest lifestyle and $42,953 p.a. for a comfortable lifestyle at retirement.

The Three Pillar Approach to Superannuation

To take a wholistic and realistic view of men and women’s retirement, more than just superannuation needs to be considered. Couples and singles alike usually do not rely solely on their superannuation to fund their retirement. Superannuation, personal savings and assets, and the government form the three pillars of retirement planning. In addition, there is the family home which can be downsized [5] to help fund retirement. Focusing on levelling out the difference in superannuation balances between the primary income earner and the primary carer is a futile exercise. What is more beneficial is to focus on growing the combined superannuation balance and assets of the couple, it is these in combination which will help fund their retirement.

Seek Financial Advice

It is recommended that you seek advice from a Certified Financial Planner to plan for your retirement. In the 2016 MLC white paper looking at the Australian lifestyle, financial security and retirement found that two in five (43%) Australians did not believe they would be able to fund their lives post work. A financial adviser can help you plan for your retirement and allay your retirement fears.


The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position, and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author. Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

Elliot Watson

Elliot Watson*

Elliot Watson is an award-winning Certified Financial Planner with over 15 years' experience. He is passionate about helping people grow and protect their wealth.

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