Women's Institute For A Secure Retirement

It’s that time of year again, as summer sets off the traditional season for tying knots and ringing wedding bells. Many women are paying close attention to the details of the big moment when they say “I Do,” but a couples’ financials deserve a close scrutiny as well. A marriage is a time to prepare for the beginning of a long-term financial relationship also, and the better the preparation, the stronger financial foundation you have to build off of. If it’s not too late, take the time to exchange credit scores before the nuptials. Along those lines, here are a few vows you should make to yourself:

I Do…Plan to be Financially Involved

While many women are taking a more equal role in their family’s finances, the majority of women are still not as involved as they should be with their family’s investments or long-term financial planning. Since money can be such a contentious topic in many marriages, take the time to develop an honest and open dialogue about your finances.

I Do…Have a Separate Retirement Plan

Women have unique financial challenges, especially as we enter into retirement.  On average, women earn less over their working years than men and they tend to live longer, which comes with significant risks. Many couples create a single retirement plan, but if it does not factor in the extra years and costs you are more likely to experience, you could be left vulnerable.  Figure out what you will need, and put money away early and often.

I Do…Know Who the Primary Beneficiary Is on Our Retirement Accounts

Don’t assume that you are the primary beneficiary of your spouse’s retirement plans. Not all retirement accounts automatically designate a spouse as the primary beneficiary.  For example, workplace retirement plans are not governed by the same regulations as individual retirement accounts. So a good first step is to exchange all the relevant documents. Then, the newlyweds can designate each other as the beneficiary on all workplace plans and any other insurance policies or IRAs. In fact, many IRAs allow you to change the beneficiary status online.

I Do…Have Assets in My Own Name

Always keep some assets in your own name, such as savings accounts, retirement and/or other investments, and bills.  This will help you stay financially involved and allow you to have direct access to your own separate financial accounts if and when you need them.

I Do…Know Where our Family’s Important Documents are Located

Always know where your family’s important financial documents are kept and keep these documents updated and organized. This will prevent any confusion or delay if and when you have to access them.

I Do…Understand the Importance of Keeping Up with the Working World

If your future plan includes taking time away from work to raise kids or to care for other family members, make sure that you keep up your professional contacts and technical skills. Also, consider that you can open up a Spousal IRA and contribute to it so that you don’t lose out on the momentum to save for retirement. Both will help you reenter the workforce when you are ready.

For same sex couples, financial issues can be different and more complicated. Many same sex couples consult with a financial planner before they marry in order to get on steady financial footing from the very beginning.

For new brides, this is a wonderful and exciting time in your life.  Keeping these financial vows will help get your new life together off to a happy and healthy start.

Women face unique challenges throughout their lives and they need a retirement plan that reflects that. National Retirement Planning Week is upon us and it is a week dedicated to educating Americans on retirement. At WISER, we understand the unique needs that women have when tackling this topic, and it is important that women themselves understand the issues that will have a tremendous impact their retirement planning.

Women on average earn less over their working years than men do, which means they have less to save. Women are also usually the primary caregivers, and are more likely to take time away from work or reduce work hours to care for children or other family members. Furthermore, women are more likely to work part-time which means fewer, if any, options for retirement benefits. What this means for many women is that they have less money in savings and pensions when they reach their retirement years. This reality is often made worse by the fact that once women are in retirement, many are likely to live alone due to divorce or widowhood, and they do not have the financial help a partner can provide. Women also tend to live longer, which forces them to stretch their retirement income over more years.  Even among those who take their life expectancies into account in their planning, there is insufficient understanding of the financial consequences of living to extreme old age—generally above age 85 or 90 where women outnumber men by 4 to 1.

Put all of this together and it is no surprise that women are twice as likely to end up living in poverty in old age. They can least afford to make mistakes with their money, and so they need to be making the most of what they have throughout their lifetime financial journey. When it comes to women and planning, while many manage the day-to-day budgeting and family finances, they are less likely to be involved in the bigger financial picture, such as investments and insurance. They may not understand or even know about their own or their spouse’s work retirement plans.  In order to secure a good retirement for themselves, however, women must be part of their family’s long-term financial decision-making.  When couples do plan together for retirement, they often share the same retirement plan, but the reality is that women face a very different retirement picture, and they need their own plan that is best suited for their unique situation.

Spend some time this week teaching yourself about what you will need to retire well. WISER’s website provides year-round resources on retirement planning, as does the National Retirement Planning Coalition website. To get started you can read over WISER’s newly re-released fact sheet, 10 Ways that Boomer Women (and Men) Can SAVE Themselves from Retirement Shortfalls. When it comes to retirement just remember, you can do a lot with even just some good, basic information; a little goes a long way and it is never too late to get started.

If you have not yet heard about the Consumer Financial Protection Bureau (CFPB), you could be missing out on great new resources to help you protect and grow your financial assets. Here are some important things to know about the Bureau:

Last July, the CFPB began operations to empower consumers with knowledge and keep an eye on the possible misconduct of financial institutions. An important arm of the CFPB is the Office of Financial Protection for Older Americans. This Office focuses on providing financial education to seniors. It is headed by former Minnesota Attorney General Hubert “Skip” Humphrey III, who has already demonstrated a strong commitment to helping older women as part of the Office’s mission.  The goal is to prevent elder financial abuse by bringing together federal and state agencies, law enforcement, aging networks and elders to strategize policies and disseminate information via the CFPB website, public forums, webinars and other media. The National Education and Resource Center on Women and Retirement Planning, operated by WISER and funded through the Administration on Aging, is proud to partner with the CFPB on these important issues that greatly impact older women.

The CFPB offers a variety of helpful resources.  Most recently, the Bureau launched a new portion on its website aimed at answering consumers’ most common questions. The Ask CFPB initiative answers more than 350 of the most frequently asked questions submitted to the Bureau by consumers. This is just the newest step taken by the Bureau to help consumers navigate the bumpy and often confusing road of finance.

The CFPB’s most pressing concerns are mortgages, credit cards, and student loans. The Bureau, whose jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies, was designed to consolidate the regulatory process and make it easier for the public to get information and file complaints. Since July, the Bureau has worked to create a website – www.ConsumerFinance.gov – that makes it easy for consumers to submit complaints about a wide range of financial products and services. The Bureau has launched a supervision program that oversees actions taken by financial institutions that include banks, payday lenders, mortgage companies, private student lenders, and others. The Bureau is also working to create tools to help consumers make better financial decisions (it has already developed a Student Debt Repayment Assistant).

To take advantage of the resources offered to you by the CFPB and its Office of Financial Protection for Older Americans, visit their website at ConsumerFinance.gov. To file a complaint, consumers can call (855) 411-CFPB (2372) or file online. The CFPB hopes to use data from its call centers to track the latest predatory scams against older adults and develop solutions for financial protection and scam prevention. You can also learn more about protecting yourself and your loved ones from financial scams and frauds by visiting the Financial Elder Abuse Resources on WISER’s website.