When you are investing time in your business – especially in the early years, paying yourself and putting away for retirement may seem like a distant dream. I will do it one day, you say to yourself. Ten years goes by and you still haven’t invested for your retirement years.

I attended a seminar on the topic of women and retirement recently and came away feeling deflated at the superannuation figures (for women) to date. I wanted to share them in the hope that it will generate a call to action from women in small business to seriously build on the retirement nest egg from this day forward.

The following information has been collated by the University of Western Australia Business School. Figures are based on women at the age of 65.

  • As a PAYE woman in the workforce the average superannuation lump sum is $174 646. The male PAYE lump sum is $282 563.
  • As a woman in small business the average superannuation lump sum is $82 951. The male equivalent is $143, 130.
  • Nineteen percent of self-employed business owners don’t have any superannuation or end up with a low superannuation balance – under $40 000 – by the time they are 65.

The next lot of figures come from Money School.

  • Australia has the second worst pension fund out of 34 OECD countries.
  • Women in the 55+ age group are the fastest growing homeless group.

What can be done to reduce the gap and minimise women living at the poverty line once at retirement age? Lacey, co-owner of Money School and Jacquie Hutchinson from UWA Business School offer some suggestions, ideally prior to getting to retirement age.

  1. Buy an asset with savings. An example of this is a house or shares.
  2. Buy assets within superannuation
  3. Find a way to replace or reduce the need for being on the pension with passive income or capital. This comes from assets brought with savings and helps us stop working when we want to, not when we have to.
  4. Build cash flow and assets through your business. This can be income through sales, dividends or paying yourself a salary. You can work out how much to contribute to your superannuation.
  5. Positively gearing a home (receiving rent from it after paying the bills), cash, bonds and shares.
  6. Concessions and contributing sale proceeds into superannuation.
  7. Business valuations for business as a potential retirement asset.
  8. Planning for a business exit strategy.

Jacquie says, research can only give a general indication on retirement planning as everyone’s circumstances are different. Living in a regional location adds another level of complexity to retirement planning. With this being the case, UWA Business School researchers will be putting together a video on the subject and distributing to women who are living in regional areas and running a small business. Jacquie and her team will be back in the South West soon to gather information on regional women in small business.

Sana Turnock, Business Development Advisor, Business South West

PICTURED: Sana Turnock (BSW advisor), Jacqueline Hutchinson (UWA Business School), Dr Beth Walker, Lacey Filipich and Fran White (Money School)