As more than 60% of women express concern about the long-term financial impact of taking time off from work for caregiving, Aware Super is calling on Australian women to proactively plan for career breaks. This advice comes as a response to the increasing financial strain faced by women who serve as primary caregivers and the escalating costs of childcare.
According to Aware Super, 70% of Australian women are primary carers, a role that often necessitates time away from the workforce. The rising costs of childcare compound these challenges, making it difficult to balance everyday expenses. Despite these pressures, superannuation remains a frequently overlooked aspect of financial planning, with 44% of women never making changes to their superannuation accounts.
Jacki Ellis, head of retirement at Aware Super, emphasised the importance of planning for career breaks to safeguard retirement savings. “We know it’s often women who are responsible for unpaid care work, leaving them with significant financial loss to their income. This has highlighted the genuine need to fill the retirement gap, so all Australians can feel confident about achieving the lifestyle they want in retirement.”
Ellis noted that women typically experience a 55% decrease in earnings within the first five years after having children. For an average female member of Aware Super, taking two one-year career breaks at ages 30 and 33 could result in a $38,000 reduction in retirement savings by age 67.
Aware Super’s research has indicated a high level of concern among women regarding the costs of child rearing and caring. To address these concerns, Aware Super has introduced enhancements to its My Retirement Planner tool, which now includes functionality to account for up to three career breaks. This update aims to help Australians better prepare for the financial impact of taking extended time off for family or study.
“Aware Super’s online retirement calculator has seen over 57,000 members and non-members engage with their super and feel more confident about their future savings,” Ellis said.
“We want that trajectory to continue. Through improvements to My Retirement Planner, like the added functionality of including up to three potential career breaks, we're helping empower Australian women with understanding so that they feel more confident about their financial security in retirement, regardless of how life changes.”
According to a news release, the latest updates to My Retirement Planner are designed to provide a clearer picture of how such breaks can impact retirement savings through integrating scenarios of extended time away from work.
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