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  • Archive for February, 2008

    Thursday, February 14th, 2008

    Women are likely to outlive their husbands, which means women may have to make their money last longer in retirement. Women may also have to manage their own finances at some point, and in order to do this successfully women should be aware of what questions to ask their financial advisers. See article below.

    Bradenton Herald, Sunday, February 10, 2008, Karin Grablin
    Wives, Prepare to Outlive Your Husbands

    The good news for women: They live longer, so they likely have more time to enjoy their retirement. The bad news: Because of this, their retirement will be much more expensive than for men.

    Statistically, women tend to outlive their husbands; on average, women will survive their husbands by 15 years. Bottom line – women need far more retirement income than do most men.

    Chances are high that a woman will have to manage her finances on her own at some point in her life, so here are a few questions that women should discuss with their financial advisers:

    • How will my living expenses change if I’m suddenly single?

    They will not likely be cut in half. The Women’s Institute for Secure Retirement recommends forecasting expenses to be 80 percent of what they were as a couple.

    • What about my husband’s pension? Women shouldn’t assume they can rely on their husband’s pension for income. If the husband dies first, his wife may only receive 50 percent survivor benefits, which probably isn’t enough to carry on her lifestyle. Not surprisingly, most widows who are poor now were not poor before their husbands died.

    • What about my husband’s 401(k) and IRA? Most employer-sponsored plan assets and IRAs can be rolled over into the wife’s IRA (depending on beneficiaries named). The rules normally in place for her IRA will govern how she can take taxable withdrawals. That can get tricky if she’s younger than 59½ and needs income, so seek professional advice.

    Also, do a “beneficiary audit” periodically, so if you need to, transitioning these assets can go as smoothly as possible. If your husband has left a 401(k) behind at a previous job, consider rolling these assets into an IRA now – while he is still alive.

    • What about Social Security? If you both collect Social Security, you will be entitled to receive whatever benefit is greater. A widow is entitled to her late husband’s benefits as long as she doesn’t remarry before age 60.

    • What about annuities we may own? If you are the named beneficiary, you may have several options for receiving these funds, including continuing the benefits of the contract as is. Since there are so many varieties of annuities and benefits out there these days, discuss your options with a qualified professional.

    • What should I know about my finances? Don’t just sign tax returns – understand them. Ask your tax preparer for explanations. Identify your financial assets and debts, and have a plan for budgeting and paying down debt. Both of you should understand what you own and what you owe, and use insurance to plan for the possibility of death or disability.

    If you are a long way from retirement, try to work as long as you can at the highest salary you can. This will give you more opportunities to save for retirement, you will have fewer retirement years to try to fund, and you could also earn higher Social Security benefits.

    Karin Grablin, a certified financial planner, is with Dictor & Martin, 2 N. Tamiami Trail, No. 608, Sarasota. She can be reached at (941) 906-7222.

    Protecting Your 401(k): What you should know before you change jobs

    Thursday, February 7th, 2008

    Changing jobs is common among Americans, but for many, it means deciding what to do with money in a 401(k) or other employer-sponsored retirement savings plan. When leaving a job, you have the option of withdrawing money from your 401(k). While it may be tempting to gain extra spending money, this is not the best option because the money you withdraw will be taxed. Kelsey Abbott, author of the article “Three Ways to Protect Your 401(k) in a New Job,” lists alternative options Americans should consider when changing jobs. They are: leave your money in your former employer’s retirement plan; roll your current 401(k) or other retirement savings plan into your new employer’s plan; or move the money from your old employer’s 401(k) into an IRA.

    For more details, please read the following:

    Estate Planning: Be prepared and plan ahead

    Thursday, February 7th, 2008
    Have you considered what would happen if you become seriously ill? Protecting personal wishes and loved ones should be priorities for those facing a terminal illness. One of the most important things a person can do is to be prepared. WISER suggests that you consult a lawyer or an expert in financial and estate planning, and prepare the following documents: durable power of attorney for finances, domestic partnership agreement, and last will and testament. Make a list including the names, addresses and phone numbers of anyone who should be notified about your death, such as doctors, attorneys, friends, relatives, or the executor of your estate. It is also advisable to specify what kind of funeral arrangements you would like, or to make these plans in advance. In addition, you should list liabilities and assets, for example, real estate or mortgages, bank accounts, investments, retirement and pension benefits, loans, and life insurance. Please visit the following links for more detailed information about financial planning, including helpful checklists and information on life insurance, Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI) for those living with HIV/AIDS.

    Financial Planning for the Terminally Ill

    Personal Planning Checklist for the End of Life

    SSDI and SSI Benefits for those Living with HIV/AIDS

    Document Checklist for End of Life Planning

    Viatical Settlements: Should I sell my life insurance policy to get cash now?


    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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