Women in retirement: The challenges and the solution for a comfortable retirement

As people approach their retirement years it is natural to have concerns about whether they’ve put enough away to achieve a comfortable retirement, given the rise in living costs and longer retirement periods than that of previous generations. However, for a certain cohort of the population, the concern of having adequate savings for their golden years, is alarmingly more apparent.

Women, on average, will face a greater challenge in making up for a significant retirement savings gap than compared with their male counterparts.

According to a 2021 paper released by leading professional services firm, KPMG Australia, 

Australian men aged between 60-64 are retiring with a median balance of $204,. For women in the same age group, it is $146,900 – a 28% gap. For those in pre-retirement years (55-59), the gender gap in savings is 33% and, in the peak of ‘earning years’ (45-49) the gap is 35%[1].This compared to the targeted final retirement balance of $545,000[2] – which is the amount recommended by The Association of Superannuation Funds of Australia (ASFA), as the ideal lump sum an individual should retire with, otherwise known as The Comfortable Retirement Standard*.

With the current Australian superannuation system linked to time in paid work, women are overwhelmingly disadvantaged as they are more likely to take on the role of the unpaid family caregiver (childbearing, child-rearing, and/or tending to sick family members). Given the propensity toward more irregular working patterns, women’s lifelong earnings and therefore, their capacity to accumulate sufficient retirement savings, are compromised by interruptions to paid employment.

Women, on average, also:

  • Earn less than men during the course of their working life – Currently, Australia’s national gender pay gap is 13.8%. As of November 2021, a woman’s average full-time earnings across all industries and occupations is $255. less than her male counterpart, per week[3].
  • Tend to live longer (longevity risk), outliving spouses (and savings) by potentially decades – In Australia, the current average life expectancy for a male born in 2017–2019 is 80.9 years, for a female, it is 85.0 years[4]. Over the next 50 years, it is expected that these numbers will continue to increase further. Based on this, more and more women will be confronted by the prospect of relying upon their own financial resources for longer periods of time, often living alone for some time[5].
  • Are generally less financially literate and more risk-averse – Prevailing stereotypes of men being the breadwinners and women being the caregiver, have resulted in generations of women taking a backseat role in their finances – specifically long-term financial planning. In a National Financial Capability survey completed in 2021, ‘over 40% of women reported that dealing with money is stressful and overwhelming, compared with 24% of men’[6].

What is the solution to the gap in women’s retirement savings?

The combination of all (or some) of the factors listed above sadly means that, far more often than not, women are caught in the ’perfect storm‘ of financial inequality, beginning their retirement years already well on the back foot.

Undeniably, much more needs to be done at both the Government and private sector levels, to help ensure the earnings gender pay gap is bridged, and women are provided greater access to a variety of support mechanisms that encourage re-entry to the workforce after time away. Further, a strategy that supports increased financial capability and literacy opportunities for women, would greatly help to address some of the ‘economic challenges faced by women in their working lives, relationships, and into retirement’[7].

Unfortunately, however, these strategies will take years to establish, and even longer before we start seeing meaningful impacts in the lives of Australian women. For generations of Australian women who are faced with the prospect of spending the entirety, or even just a period of time in retirement without a partner, finding ways to ensure a comfortable lifestyle can be daunting. A solution to their retirement savings gap is needed now.

At Futureproof, the solution is clear – and on the way.

By harnessing the power of the last great, untapped asset class – home equity – home-owning female retirees will be able to fund their retirement in a low-risk, responsible way. Our soon-to-be-launched Equity Preservation Mortgage™ is designed to allow for the monetization of home capital into tax-free annuity income with no depletion of home equity.

The Equity Preservation Mortgage™, allows female homeowners to overcome the accumulative economic disadvantages faced in their working life and in social circumstances. While it is only one piece in the puzzle to properly address these challenges, it is certainly a giant step in the right direction.

** For more information on women’s economic security in retirement, we recommend reading the insights released in 2020 by the Australian Government’s Workplace Gender Equality Agency:


[1] https://home.kpmg/au/en/home/insights/2021/08/gender-superannuation-gap.html

[2] “ASFA Retirement Standard.” The Association of Superannuation Funds of Australia Limited (ASFA). All figures in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6 percent.; https://www.bt.com.au/personal/your-finances/retirement/how-much-super.html
*This estimated lump sum amount assumes that the retiree/s own their own home with no mortgage, are able to draw down all their capital, and receive a part Age Pension.

[3] https://www.wgea.gov.au/publications/australias-gender-pay-gap-statistics

[4] https://www.aihw.gov.au/reports/life-expectancy-death/deaths-in-australia/contents/life-expectancy

[5] https://www.aph.gov.au/parliamentary_business/committees/house_of_representatives_committees?url=ageing/strategies/subs/sub84.pdf

[6] https://www.financialcapability.gov.au/strategy/part9#_ftn9

[7] https://www.financialcapability.gov.au/strategy/part9