media release
7 February 2025
HESTA research reveals more support needed for women navigating the 'rite of passage' into retirement
Research[1] commissioned by HESTA has revealed more needs to be done to assist women through the 'rite of passage' into retirement – especially when retirement is unplanned.
The research identified the complex financial and emotional process of planning for and entering retirement. This is further complicated by the tendency of many health, aged care, and community services (HACS) workers to adopt permanent ‘semi-retirement’ – the transitional phase between working and not working.[2]
More than 1800 pre-retirement Australian HACS workers were surveyed nationally, finding two-thirds were worried about running out of money and being able to afford basic needs in retirement, while 61% were concerned about potential health issues or medical expenses. Half of those surveyed were concerned about not being able to maintain their desired lifestyle, while 30% were concerned about social isolation or loneliness.
HESTA CEO Debby Blakey said this research was part of a whole-of-fund approach to retirement and an enhanced focus on data, analytics and modelling to better understand members’ needs.
Women often have lower lifetime earnings and smaller superannuation balances due to part-time work or career breaks to raise families. Many women also find themselves in early or unplanned retirement to care for ageing or unwell family members.
“Almost 80% of our members are women and they have diverse needs as they approach or enter into retirement,” Ms Blakey said.
“Historically, financial advice has not targeted women, and this needs to change. Often, women discover they have more choices than they initially thought and can significantly improve their financial position.”
Around 47% of HESTA members retired involuntarily, higher than the general population.[3] Involuntary retirement occurs when a retiree is forced to retire due to circumstances beyond their control.
Approximately 42% of HESTA members provide unpaid care – for their children or loved ones. Unpaid care affects labour market productivity, disproportionately disadvantaging women in retirement. HESTA modelling shows unpaid care decreases members’ superannuation savings at retirement by around 16%.
In the next five years, around 14% of HESTA members are expected to retire. Ms Blakey noted there has been an increase in women taking a greater interest in planning for retirement, including seeking out financial advice.
“As women approach retirement, transitioning from a regular income to relying on super savings raises new questions and concerns - particularly as they deal with daily cost-of-living pressures and rising medical expenses,” Ms Blakey said.
“We’re focused on helping members with this shift from accumulating savings to living off them so they can confidently manage retirement income and feel secure about their future.
“It’s crucial women recognise their super is there to support their retirement. Taking an early interest in your super is key to optimising the savings you’ve worked so hard to build.
“For example, retirees too often think it's easier to leave their money in super and withdraw as needed. However, starting a retirement income stream can offer significant tax benefits and a flexible way to access super after retiring.
“Moving your super into a retirement income stream can provide a regular income while the balance stays invested. This can mean more savings overall, even if retirees don't notice it immediately. There are some rules, like a minimum yearly withdrawal based on age, but you can take out lump sums, if needed. Many retirees don't realise there’s this flexibility or the benefits, such as the investment earnings, are typically tax-free,” Ms Blakey said.
Appropriately timed advice has also been shown to have positive results for HESTA members. In FY24, 12% of HESTA members were engaged in some form of help and advice. Of the members who received financial advice from HESTA in FY24, 67% felt more confident about their financial situation after the appointment[4].
HESTA strongly supports improved access to affordable, quality advice through implementation of Tranche 2 of the Government’s Quality of Advice reforms.
Ms Blakey said the expansion of intra-fund advice to include Transition to Retirement, Retirement Income Stream, household view, age pension, and implementation would help provide more Australians access to the benefits of financial advice and support.
“We’re very supportive of reforms that help to improve retirement outcomes at scale through providing the flexibility for funds to shape their advice services to the needs of their members. If super funds can consider a member’s personal and household circumstances, such as any partner’s income and super as well as any entitlements to Centrelink benefits such as the Age Pension, it really helps us better support our members plan for their retirement,” Ms Blakey said.
[1] Prepared by: Evolved Thinking May 2024, an independent research agency. Survey of 1815 HACs respondents and 29 90-minute interviews with HACS women.
[2] Prepared by: Evolved Thinking May 2024, an independent research agency. Survey of 1815 HACs respondents and 29 90-minute interviews with HACS women.
[3] Prepared by: Evolved Thinking, October 2024, Involuntary Retirement Quant Report.
[4] HESTA voice of member program.
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