The ‘motherhood penalty’ is draining your super. Here’s how to stop it

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Between clothes, cribs and care, it is no secret that child-rearing is a costly exercise, but one of the biggest prices of parenthood is the price working women often unknowingly pay to start a family in the first place.

The “motherhood penalty” refers to the drop in a woman’s earnings following the birth of a child. Though the damage is often discreet at first, the effects can be felt long after a woman returns to the workforce, and ultimately widens the retirement savings gap for women.

The penalty is driven by reduced workforce participation, fewer hours worked, slower career progression and, in some cases, outright discrimination. A man’s earnings, on the other hand, typically recover quickly after becoming a father – in stark contrast to the almost 50 per cent drop in a woman’s earnings experienced for as long as a decade after having a child.

For women looking to take the next step in career and family planning, here are some tips to protect your superannuation from the motherhood penalty.

Growing your super while raising your children

There are a few key considerations I encourage prospective mothers to take when family planning, the first being to start saving early. The power of compound interest is not to be underestimated, and a savings plan established early will help to close the gap for women’s retirement savings.

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© Brisbane Times