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Planning ahead to help protect your super during a career break

With a baby on the way and home renovations about to start, Kate* is taking leave from her career, but the right planning should ensure her super balance won’t suffer too badly.

Key lessons

  • Make extra personal contributions to super, if you can, to help make up for any time off work while raising children1.
  • Check to see that your insurances are appropriate to protect you and your family.
  • Make sure your super’s investment options are right for you and your stage of life


Four months out from giving birth to her second child, Kate* is wrangling a toddler and getting ready for a team of builders to traipse in and start renovating the family home in Victoria. A consultant engineer who is trained as an architect and married to another engineer, 34-year-old Kate says she and her husband put together a financial strategy to cushion their lifestyle during what will no doubt be a lengthy period of adjustment.

Boosting super pays off

They took out a loan to handle the renovations and because Kate plans to take 12 months maternity leave, she started boosting her personal super contributions, adding any bonuses she earned during the past year, so their retirement savings wouldn’t suffer from this period without a regular wage. “I work for a small firm, so I won’t get paid leave,” says Kate. “I’m very aware that will impact my super along the way, so I chose to put any money I got during the year into that.”


Fortunately, Kate’s super balance is healthy. “Employer contributions started with my first job in high school,” she says. “But for a long time I just accepted whatever plan my employer chose. And, until recently, I only made extra contributions when there was a government incentive to match them, and that was only what I could afford at the time.” Now, with a growing family and more experience of life and the cost of raising children, she’s decided a smarter approach to super is necessary.

A working to live attitude

Kate likes the stability of being an employee, and she’s enjoying the process of building her skill set, taking on more responsibility and being recognised for her professional achievements.  She’s thought about starting her own business. “It’s definitely a possibility,” she says. “But not in the short or medium-term. The stress of being in charge would be a bit daunting.” And retirement is too far away to consider seriously. “I haven’t planned that far ahead. I probably take the view that I work to live not live to work.”

With that in mind, she and her husband have had the conversation about family planning. That is, how the household and childcare will function with two working parents. “At the moment we’re both working four days a week, and we’ve talked about continuing that even when we don’t need to stay home for the children,” says Kate. “But we’ll have to think a bit more about how that will affect us in the long run. It’s not something we’ve sat down and calculated yet.”


For now, money worries are not part of the plan. There will be challenges, of course. “But we’ve both got relatively stable, well-paid jobs,” says Kate.  “And we’ve made the effort to speak to a financial adviser about our level of insurances. We’ve got income protection insurance, and increased death and permanent disability (purchased through super) to make sure we’ve got enough cover to pay our mortgage and take care of the children.”

Early action and extra contributions make sense

Kate’s move to make additional extra contributions to her super before she takes maternity leave will help her avoid the gender super gap suffered by women. Women currently retire with 37% less superannuation than men1. Megan Knowles, a financial adviser with Freya Financial, says Kate has done well to be organised with her finances. “If you have the ability to prepare for a situation, it is always better than repairing after it’s happened,” she says.

“Kate’s done the hard yards by making those contributions for the time she’s not at work and not getting the employer’s contribution. Because it could be six months, 12 months or five years – some people don’t go back for ages because that’s what suits their family. “But it can have a massive impact on their retirement savings,” says Megan.

If you have the ability to prepare for a situation, it is always better than repairing after it’s happened.”

Protecting your most valuable assets

Understanding different types of insurance is another important step for young families, says Megan. “It’s never a nice thing to think about, and a lot of people unfortunately either don’t think about it until it’s too late. But it’s good to be confident knowing that, if something happened to you or your partner, there’d be money to pay for carers to help with the children,” she says.


Total and permanent disability insurance is offered by most superannuation funds or you can choose to pay it outside of your super. Shop around and weigh up the costs of the premiums, the amount you think you’ll need to insure for and what’s included in the policy. And, if you happen to be a stay-at-home mum at the moment, the insurance is still useful security, says Megan.


“Stay-at-home mums often undervalue themselves and think that if they weren’t there it wouldn’t make much of a difference economically on the family. But think about how much you would have to pay somebody to do what you do every day, it adds up extraordinarily quickly. “So, understand what you contribute to the household and what there is to insure. It’s so important and often overlooked,” Megan says.

Taking your next steps

  1. Check your super fund statement or log into your account – see your super balance and learn more about your investment options, so you can improve your financial literacy.
  2. Update your Tax File Number by contacting your super fund. If they don’t have it, you’re probably paying too much tax.
  3. Education is key – speak to your employer about making extra contributions3, ask family and friends to explain anything you don’t understand or speak to an adviser about planning your financial future.

Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (Colonial First State) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. Colonial First State also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from or by calling us on 13 13 36.

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