Steps Women Can Take To a Secure Retirement

Women are not facing the the battle for better pensions alone.

Lawmakers and others are looking for ways to improve the pension system. But women still need to focus on "preparation and personal responsibility," says Teresa Heinz, chair of the Heinz Family Philanthropies, which supports efforts to educate women about pensions.

"Whether married or single, whether working in or outside the home, every woman must assume responsibility for understanding the decisions that could influence her financial future," Ms. Heinz says. Here are some tips from experts on how to do this:

Find out what you've got

*Ask for pensions. Many small-business owners, for example, report that people never ask them for pensions so they don't think they're wanted, says Cindy Hounsell, director of the Women's Pension Project at the Pension Rights Center in Washington.

*If your company does offer a pension plan, find out if you are included and how long it will take for you to be vested - qualified to get benefits. If you have already qualified, see what your monthly retirement benefit is so far. Also, Ms. Hounsell says, be sure you keep records of pensions at all jobs in which you were vested.

*Check to see what the current amount of Social Security you qualify for is. Call (800-772-1213) to request an "earnings and benefit estimate statement." You will need to fill out and return a form before your benefit can be computed.

Save on your own

*Invest in a 401(k) plan, if your company offers one. Retirement income is sometimes called a "three-legged stool," which includes Social Security, pension, and private savings, says Frances Leonard, a lawyer and author of books on women and money. This can be difficult for women in low-paying jobs. Still, it is important to try to invest.

Vesting is also an issue with some 401(k) plans, Hounsell notes. While you can start investing your own money fairly quickly, some companies that provide 401(k)s will not offer matching contributions to your account until you have been employed there for some time. The average time it takes to be vested for a traditional pension plan is five years; some 401(k)s can take that long as well.

*Save in a tax-sheltered individual retirement account (IRA). This is an option for women who are not employed or whose employers do not offer traditional pensions or 401(k)-style plans. If you are working, you can contribute up to $2,000 in a given year. If you are married, you and your spouse can open separate accounts. A nonworking spouse can put $250 a year in an IRA.

Plan with your spouse

*Be aware of your husband's pension benefits and how they affect you - even if you are employed and have your own pension.

If your husband gets a pension from a private company, for example, you will usually have a legal right to a survivor benefit if he dies. If you waive that right, which, since a 1984 law, must now be done in writing, then your husband will get more money when he retires. But if he dies, you will not get any money at all. With the survivor benefit, you will get at least half the benefit he was receiving.

By law, spouses of federal employees must also give their approval before survivor rights are waived. State employees do not have this protection unless the state has passed a law to that effect.

*Plan carefully if your husband moves his money in a lump-sum out of a traditional pension plan; you will no longer automatically have a right to it under the pension laws.

This situation can arise if he changes jobs or elects to take his pension all at once when he retires. The rights you have to the private pension money through the survivor benefit will no longer apply once he moves the money to an IRA, for example. Even though you may be named as a beneficiary of the IRA, your husband could also leave some of the money to children or others, or remove it without your knowledge.

Couples should make financial choices together, say advocates, who note that marriage is also an "economic partnership" that often requires careful planning to make sure both spouses are provided for in retirement.

*Ask for pension benefits, or an equivalent asset, as part of a divorce settlement.

"For most couples ... the pension is their second-largest asset, the largest being the family house," write authors Karen Ferguson, director of the Pension Rights Center, and Kate Blackwell, in "The Pension Book" (Arcade). In 1984, private pension plans were required to honor state court orders that divide pension benefits in divorces.

Advocates note that splitting a pension in a divorce is complicated, so be sure you have an attorney who has knowledge of the procedure, or has access to someone who does.

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