When considering taking a career break, we would tend to focus from a money perspective on the loss of income and probably much less on the impact on our ability to save for retirement.

In short, leaving the workforce for a period – perhaps to raise a family or help care for an elderly parent – affects our compulsory and voluntary super contributions.  

It could be said that the impact on our savings capacity is the hidden or less-obvious financial cost of taking time out from the workforce for family reasons.

MoneySmart, ASIC’s personal finance website, has a useful and timely personal finance tool called a Career break calculator, designed to crunch the numbers on the cost to savings of a career break, given an individual’s personal circumstances. These circumstances include current income, current savings pattern and intended length of time out of the workforce.

The ageing of Australia’s population and increasing longevity will no doubt lead to more adult children – many of whom would be nearing retirement age themselves – leaving paid work for a time to care for very elderly parents.

Not surprisingly, research papers from the Association of Superannuation Funds of Australia (ASFA), Rice Warner Actuaries and Vanguard, among others, name interrupted working lives among the prime reasons why women have lower average super savings than men.

Another critical reason why women have lower average savings than men is, of course, that their average incomes are lower. See Super’s gender gap: the ‘gendermomics’ of retirement savings, Smart Investing, October 2014.)

An ASFA research paper, An update on the level and distribution of retirement savings (PDF), published in March, suggests that average super balance of men at the time of their retirement in 2011-12 was 88 per cent higher than the average balance of women in 2011-12.

Fortunately, there are ways to try to minimise the impact of a career break on your long-term savings that a financial planner can explain in detail, taking your circumstances into consideration.

For instance, the making higher voluntary super contributions within the contribution caps if possible in the years before taking time out of the workforce can provide a valuable savings buffer for when your salary stops flowing. (MoneySmart’s calculator provides an option to take such higher contributions into account in its calculations.)

Perhaps, an opportunity may arise – again allowed for in MoneySmart’s calculator – to make larger lump sum contributions, perhaps from an inheritance or asset sale into super.

Another way to plan to build up retirement savings is to consider retiring permanently at a later date than initially envisaged. (This is also addressed in the calculator.)

There is a strategy to keep contributing to super during a career break by practising contribution splitting between spouses. This involves a spouse still working directly some or his or her concessional contributions (compulsory, salary-sacrificed and personally-deductible) into the super account of a spouse who is taking time out of a career.

Super fund members can ask their super funds to transfer up to 85 per cent of their concessional contributions into a spouse’s super account – whether or not the spouse is in the workforce.

When facing an interrupted working life, it is crucial not to overlook the possible impact on retirement savings – and to try to do something about it.