Women who take a break from their careers to raise children will be the big winners if the superannuation guarantee is raised from 9 to 12 per cent, according to the Australian Institute of Superannuation Trustees (AIST).
A research paper prepared for the AIST by the Australian Centre for Financial Studies found that an increase in the superannuation guarantee to 12 percent benefited couples raising children – particularly when one parent took significant time out of the workforce.
The research found that couples would receive an increase in combined retirement savings of over $211,000, which would increase the replacement ratio (the income received in retirement compared to the pre-retirement income) from 50 to 70 per cent.
AIST chief executive Fiona Reynolds said the extra 3 per cent in contributions during the remainder of their working lives would make the retirement of women who take a career break much more comfortable.
“Lifting super contributions is important for all Australians, but it is particularly vital for those who leave the workforce to look after kids,” said Reynolds.
“Unfortunately, time out from the workforce can have a dramatic effect on a couple’s superannuation balance,” she added.
