Money date night

When is your next Money Date Night?

Lisa Brincat of Tipping Point Consultant contributes a guest post urging couples to plan for their long term financial future. Lisa shares the importance of taking the gender pay and superannuation gap into account.

For those not familiar with straight talking, everyday money guy Scott Pape: he advocates for money date night for couples to talk their finances over. So I am jumping on the bandwagon (and wish I had a cute dog by my side as he does) and suggesting you put a discussion about your future, your investments and super on the table.

This is what comes up when you Google the average wage in Australia

  • The average full-time male salary (excluding overtime) in Australia is A$83,902 per annum
  • The average full-time female salary in Australia (excluding overtime) is A$70,392 per annum.

Likely to readers of this particular post, the gender pay gap will not come as a surprise.

What doesn’t get enough air time is the conversations that couples should be having about their long term game plan for investments

Let’s compare: A woman reaches the average salary of $70,392 by age 25, contributes the 9.5% and works consistently until age 70. A man reaches the average salary of $83,902 by age 25. The difference in the retirement projection is over $115,000.

Plugging these figures into the Industry Super Fund Retirement Projection Calculator shows us that women will run out of superannuation 1 year before they die. Men on average will have a lower life expectancy.

Superannuation forecast diagram 1Superannuation forecast diagram 2

Source: IndustrySuperFund Retirement Projection Calculator

Let’s now compare the retirement balance for women under a scenario that they take 5 years out of the workforce, making low to no contributions in that time, with the retirement balance of a woman who takes 10 years out out of the workforce.

Superannuation forecast diagram 3Superannuation forecast diagram 4

Note: For ease of calculation I have made the time taken out of the workforce from the start of career (by adjusting starting age from 25 to 30 and 35 respectively), which will not completely mirror reality but the aim is to consider your long term investment plan.

Most women I know prefer not to take the “Maybe if I am lucky I will die early” approach to their financial future

So, have a conversation on the long game, particularly if you are woman who is spending time out of the full time wage earning workforce, or planning to. Two great questions to frame the conversation, are:

  • What actions will we be taking to invest in both of our Super funds this year?
  • Are we on track for our long term lifestyle goals?

Lisa_Brincat_Bio PicLisa Brincat is a strategic thinker and management consultant at Tipping Point Consultant.

She mentors women in business through Ambitious Mamas. Lisa gets up everyday to make a difference in her children’s future by seeking out the best thinking from a network of leaders, change makers and wealth creators at The Futurist Collective. Her super power is supporting people who want to take action and leave a lasting impact and legacy for the next generation.

 

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Posted by Jade Collins - Femeconomy Founder

Mother, wife, daughter, determined dreamer. Lover of books. Background in Human Resources leadership in global organisations.