Closing the women's retirement savings gap: strategies for the late-career years

Australian women typically approach retirement with less superannuation than men. Estimates of the gender super gap at retirement age vary by source and by how it is measured (mean versus median, and the age band used), but it is commonly put at around 20-25% — meaning a typical woman's balance approaching 60-65 is roughly three-quarters to four-fifths of a man's. The causes are structural and well understood: career breaks for caring (children, ageing parents, partners); higher rates of part-time work; lower lifetime earnings from the gender pay gap and occupational segregation; and the way these factors compound across a 40-year working life. A smaller balance, combined with women's longer life expectancy, produces a real shortfall in retirement income that falls disproportionately on women. For women in their 50s and 60s, several specific strategies can narrow the gap in the late-career years. None is unique to women, but each is disproportionately valuable where a balance has been disrupted by life's structural realities.

The structural causes are largely beyond any individual's control. Women in the current pre-retirement cohort (born roughly 1960-1975) worked through years of unpaid parental leave with no super, years of part-time work with proportionally smaller contributions, and a workforce in which compulsory super was not universal until the early 1990s. The compounding effect is severe — contributions missed in one's 20s and 30s would have had 30-40 years to grow, so the value of what was "lost" dwarfs the nominal amounts. A welcome structural fix arrived on 1 July 2025: the government now pays a Paid Parental Leave Superannuation Contribution of 12% (based on the Super Guarantee rate, plus an interest component) on government Parental Leave Pay for children born or adopted from that date, paid by the ATO to the recipient's fund after year-end, taxed at 15% and counting toward the concessional cap. That helps future generations but offers no retrospective relief to today's pre-retirees — which is where the catch-up strategies come in.

The spouse contribution splitting mechanism (regulation 6.44 of the SIS Regulations) is the most powerful intra-family rebalancing tool. It lets a member split up to 85% of a year's concessional contributions to their spouse's super account in the following financial year. Where one spouse — historically the husband, given the pay gap — has the larger balance, splitting 85% of his concessional contributions to her each year can, over a decade, shift well over $200,000 of contributions across and materially close the family-level gap. The receiving spouse must be under preservation age, or between preservation age and 65 and not retired — easily met for most women in their 50s and early 60s. It also helps the higher-balance spouse manage the transfer balance cap: moving contributions to the spouse with cap headroom preserves the family's combined ability to hold money in the tax-free pension phase. Many couples simply don't know the mechanism exists; flagging it at the annual review and lodging the splitting election is straightforward.

The carry-forward concessional contributions rule is the catch-up superpower for a woman whose total super balance (TSB) was under $500,000 at the previous 30 June. It lets her use unused concessional cap from up to five prior years on top of the standard $30,000 annual cap (FY25-26). For a woman returning to higher income after years of low or no contributions, that can allow well over $100,000 of deductible contributions in a single year — best deployed in a high-income year (after a promotion or return to full-time work) when the marginal-rate deduction is largest. The contribution itself is made either by salary sacrifice through the employer or, more commonly for the self-employed, as a personal deductible contribution under section 290-150 of the ITAA 1997 (with the notice-of-intent requirements in section 290-170). It reduces assessable income at the member's marginal rate — in the relevant FY25-26 bands typically 30% or 37% — and is taxed at just 15% in the fund, a clear net benefit.

For windfall moments, non-concessional contributions (NCCs) are the pathway. The NCC cap is $120,000 a year for FY25-26, or up to $360,000 under the three-year bring-forward where the TSB allows, falling to nil once TSB reaches $2.0M — rarely a constraint for women approaching retirement with smaller balances. An inheritance, a divorce settlement, or the proceeds of selling an asset can be moved into super this way, entering as tax-free component — which also helps later death-benefit planning, since the taxable component passing to a non-dependant adult child is taxed at around 17%. And for women whose income is still modest, two government top-ups help: the super co-contribution pays up to $500 where a low-income earner makes a personal (non-concessional) contribution and earns at or under the lower threshold of $47,488 (phasing out at $62,488) for FY25-26 — a $1,000 contribution attracting the full $500 is a 50% return before any investment growth — and the Low Income Super Tax Offset (LISTO) refunds the 15% contributions tax (up to $500) for those with adjusted taxable income up to $37,000.

The longevity dimension is the overlooked corollary of the savings gap, though it is smaller than often stated. At birth, Australian life expectancy is 81.1 years for men and 85.1 for women — about a four-year gap. But at age 65 the gap narrows: a man can expect to reach about 85 and a woman about 87-88, a difference of roughly two-and-a-half to three years. Even so, a smaller balance has to stretch over a longer retirement, which makes the gap more consequential than the dollar figure alone suggests. Modelling longevity risk explicitly — and considering longevity-protecting products such as lifetime annuities, accepting the trade-off of reduced flexibility — matters more in women's retirement planning than in men's.

What do worked planning examples show?

These two cases show how the strategies apply in practice. Illustrative only — not personal advice — using FY25-26 figures.

Case 1 — Linda, 58, married to John, 60. Linda has $180,000 in super; John has $620,000. She took 12 years out of the workforce raising three children, worked part-time afterwards, and returned to full-time work three years ago. On these facts several strategies stack. John can split up to 85% of his concessional contributions to Linda each year — if he contributes the full $30,000, that is up to $25,500 a year moved to her account, and over the seven years until he retires the cumulative shift could approach $180,000. Linda's TSB is under $500,000, so she can also use carry-forward: with several years of unused cap from her part-time history, her available concessional cap in a given year could be well over $100,000, best used in a higher-income year alongside her ordinary contributions. (The co-contribution no longer helps her now that her income has risen.) On these facts, the rational plan is for John to lodge the splitting election annually while Linda makes catch-up deductible contributions up to her available cap, concentrated in her best-income years. Between the opening $180,000, the spouse splits, the catch-up contributions and investment growth, Linda's balance at 67 could plausibly reach the high six figures — a materially narrower gap.

Case 2 — Carol, 64, divorced eight years ago, with $240,000 in super, working part-time as a consultant on about $55,000 a year, who has just received a $400,000 inheritance. On these facts, because her TSB is under $500,000 she can use the NCC bring-forward to move up to $360,000 into super in one triennium — though keeping some outside super for liquidity is sensible. She can also make a personal deductible contribution from her consulting income within the concessional cap (using carry-forward to expand it if needed). On these facts, a rational approach might be to contribute around $300,000 of the inheritance as a non-concessional contribution while retaining about $100,000 for an emergency buffer, and to make a deductible contribution from her consulting income to cut her tax that year. That could lift her super from $240,000 toward roughly $570,000-plus before growth — a transformative change to her retirement outlook, and the tax-free component from the NCC also helps if the balance later passes to non-dependant beneficiaries.

For Australian women approaching retirement, the gender super gap is a genuine structural challenge — but the late-career years offer several powerful ways to catch up. The advice work is to quantify the gap at the individual level (projected balance against needs), match the available strategies to the client's circumstances (partnered or single, employed or self-employed, TSB level, any windfall), execute them in coordinated annual planning, and fold in longevity-aware income planning given women's longer retirements. For many women, a deliberate late-career strategy closes a meaningful part of the gap — turning a constrained outlook into a comfortable one.

Sources

• Australian Taxation Office (ATO) — Super co contribution
• Australian Taxation Office (ATO) — Government contributions
• Australian Taxation Office (ATO) — Paid parental leave superannuation contribution
• Australian Bureau of Statistics — Latest release
• Australian Taxation Office (ATO) — Contributions caps