Building a Solid Financial House

Between raising children and taking care of parents, women are losing an average of 15 years from the workplace. For every year a woman is out of the work force she must work five years to recover lost income, pension coverage and promotional opportunities. In spite of our best intentions, between the 50% divorce rate and the fact that women tend to live seven to ten years longer than men, the reality is that if we aren’t already, most of us are going to be the sole person responsible for our financial security at some points in our lives.

Women are by nature caregivers and nurturers. We take care of our children, husbands, partners, grandchildren and parents. We take care of everyone, but ourselves. It’s easier to give someone else. We’ve been programmed since childhood to take care of others and if there’s anything left to take care of ourselves. It’s crucial to be proactive and make an investment in ourselves because the investment we make now will determine our quality of life both financially and personally in the years ahead. Five things often overlooked that women should consider as they start or continue to build their financial house include:

Named Beneficiaries
If you have property with a named beneficiary, it bypasses the instructions in your will. This includes life insurance, retirement accounts, tax-deferred annuities, U.S. Savings Bonds and bank accounts in trust for others. When I started working for the Federal Government in 1975 I remember signing lots of paperwork, which included designating the beneficiary for my life insurance. Many of us complete and sign similar paperwork throughout our careers. But, how often do we go back and review and update our beneficiaries. When you are young, just starting out you might designate your mother or father as your beneficiary. However, when you get married, you need to review your life insurance policy to revise your beneficiary. If you don’t take the time to update your beneficiaries and die unexpectedly, your life insurance proceeds will not go to your spouse. Instead, your parents will receive the proceeds. And, it’s same if you’ve been married more than once and didn’t change your beneficiaries

Health Insurance Coverage
If your spouse dies and had health insurance coverage for your family through his employer, the coverage will usually terminate the month following his death. However, you will have the opportunity to continue the coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA requires most employers with group health plans to offer employees the opportunity to continue temporarily their group health care coverage under their employer’s plan if their coverage otherwise would cease due to termination, layoff, death or other qualifying events. COBRA coverage is generally more expensive than what the employee paid and usually ends after 18 months.

Joint and Survivor Annuity
If you’re married when your spouse retires, you’re normally entitled to a survivor’s benefit if your spouse dies before you – unless you agree to sign away rights to a survivor’s benefit.