How to keep your super growing on parental leave

When you think about the cost of having children, the obvious things come to mind: a cot and pram, nappies and, down the track, an education.

Something you may overlook is the long-term impact on your wealth - in particular your super.

If you, or your partner, take parental leave from work - whether three or 12 months - then your super balance will take a hit.

Take an extended career break and your super will really suffer.

Research conducted by Rice Warner Actuaries in 2010 found that a woman who takes a five-year break from work will be $45,200 (or 26%) worse off than a woman who works through that period.

Here are a few things you can do to keep growing your super while you're on parental leave:

Talk to your boss

This might be tricky to negotiate but you can ask your employer if they would still make super guarantee payments while you're on parental leave.

Some employers may feel this will give you a further incentive to return to work. If you have no intention of going back, though, this might not be a smart move.

Make extra contributions yourself

Continue to make contributions, even if it's $20 a week, while you're receiving parental leave payments. If things are really tight, at the very least try to find $1000 to add to your super to take advantage of the federal government's co-contribution of up to $500.

You need to earn less than $34,488 and deposit $1000 to get the maximum co-contribution. See ato.gov.au/super to find out about other eligibility requirements.

If you really can't manage paying extra, then make sure you do make extra payments when you return to work.

The super industry body, ASFA, suggests following the 1% rule, which is that for every two years out of the workforce women need to make an additional 1% contribution for the rest of their working lives.

Get your spouse to pay your super

If you earn less than $10,800, your spouse can contribute up to $3000 a year into your account and in return they get a tax offset of 18% (or up to $540).

They might be eligible for a partial offset if you earn less than $13,800. This way you both benefit. Longer term there's super splitting, where your spouse can split up to 85% of their before-tax contributions with you. For more information see ato.gov.au/super.

Consolidate your funds

If you have several super accounts think about rolling them into the one account.

You will pay one set of fees and this can help you build your balance in the long run. Just make sure you do your research about the fund you choose and the option your money is invested in.

Get stories like this in our newsletters.