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Financial security not a pipedream

A dark cloud hung over International Women’s Day this year. Two weeks earlier, the Australian Bureau of Statistics published figures that showed the national pay gender gap had widened to a record high of 18.8 per cent.

The average full-time male in Australia earns $1578 a week, against $1289 for women. In 2013, the gap was 17.4 per cent.

If there was a silver lining, it was that the pay gap narrowed in industries that have traditionally been home to the biggest crevices: financial services and healthcare. (Still hard to put on a happy face, but there is a lesson in there somewhere for women considering career changes.)

The pay gap, of course, is added to career breaks and often lengthy periods of part-time work, which all combine to put women on the back foot when we are trying to ensure our financial security, both while we are working and once we have retired and hopefully spending more time holidaying and lunching.

Why might we want financial security? If nothing else it gives us the head space to be who we want to be. Perhaps more importantly, it gives us the head space to focus on family and friends or take care of ageing parents or help others who are in a less fortunate position. It’s just like that increasingly loud and annoying airplane safety announcement says: you need to put on your own oxygen mask before you can help others.

Saving for retirement means we won’t be putting a burden on our children when we are no longer working.

The Association of Superannuation Funds of Australia estimates that a couple needs $58,000 a year to live comfortably in retirement, while a single person needs $43,000. I won’t go into how much money we need to fund this level of annual income, but needless to say it is quite a lot. 

  

It is little wonder that many experts argue that putting money aside for retirement should be a top priority.

The best part about savings plans is that the mechanics aren’t difficult. If we are prepared to set aside a little time to get ourselves organised, it does not take much to figure out the most effective ways to save a little bit here and there, to understand our (good and bad) habits, stop ourselves from buying too many pairs of over-priced shoes, create a few (achievable) financial goals and ideally to instil in our children good savings habits to help them have secure futures, too.

It is a journey and it is one that no one needs to embark on by themselves. So welcome to Her Money. It’s all about us.

Sally Patten

Enough to last until age 100

Doing her homework has put high school teacher Helene Lionakis in a secure financial position at the age of 54, even with two young children to raise, as retirement beckons.

Lionakis has worked out how to live well working three days a week and fund her lifestyle till she is 100.

‘‘I’m very organised, very tech-savvy, and do all my sums and figures,’’ says Lionakis.

I’ve always known where I stood financially and I’ve always lived within my means. It’s common sense.

Helene Lionakis

Lionakis is able to adjust easily to living on less when necessary, such as when her long-held investment property is unleased. If there is an economic downturn she will find ways to save more – whether it’s by avoiding the hairdressing salon or by taking tutoring jobs. She cleans with bicarb and vinegar, shops at Aldi and, although a Melburnian, never buys coffee from a cafe.

‘‘I don’t have a lot of things. I don’t go out and shop; I just buy what I need,’’ says Lionakis. ‘‘I’ll spend an hour or a day on the phone to get the best deal.’’

She’s applied this methodical approach to planning her retirement.

‘‘If I leave work at 65 and live to 100, I’ll need 35 years of $50,000 or $1,750,000. So I salary sacrifice to the max into the most aggressive super fund.’’ Lionakis and her husband, a managing director of a factory, keep their finances separate.

‘‘He pays the mortgage and I pay for most bills,’’ she says. ‘‘I’m happy to do the majority of the finances. I don’t even know what his credit card is. I do know that when I die I won’t leave debt to my poor children.’’

Case study by Natasha Hughes