If you’re a working mother, chances are you may also have a ‘Super Baby Debt’. The ‘debt’ is the money Australian mums are losing from their retirement savings by taking time out of the workforce to have children.
By applying The One Per Cent Rule you can overcome this problem. Simply add an extra 1% in super contributions over your working life.
Take the power back and secure yourself a more comfortable retirement.
Steps to avoid a ‘Super Baby Debt’
- Apply The One Per Cent Rule
- Salary sacrifice into their super
- Regularly top up their super or set up spousal contributions
- Consolidate their super
- Speak to a financial adviser
You can also find out if your super savings are currently on track for retirement by using our online retirement simulator. It’s quick, easy and free.
The 1% Rule is simply adding one percent to your super when you return to the workforce after maternity leave. As a general rule of thumb, for every two years out of the workforce, women will need to contribute an additional 1% contribution of their salary to their super account until retirement. It is a simple and effective way for mums to recoup their retirement savings after taking time out of the paid workforce to care for their children.
Calculated using ASFA’s Super Guru Retirement Projector and based on a 32 year old woman, who takes two years out of the workforce and has a $115,000 salary, compared to a 32 year old woman, with the same salary and super balance, and no time out of the workforce. This information is current as at August 2012 and may be subject to change.
