Women and Retirement

While all workers need to save more for retirement, women face additional challenges because they have lower earnings, experience higher job turnover, and are employed in industries with low or no pension coverage.

Does your employer have a pension plan?

Employers are not required to have a pension plan. You need to find out from your employer if a plan is offered.

Do you know what type of plan it is?

There are two basic types of pension plans. A traditional plan promises a specified pension benefit at retirement usually based on the years you worked and your salary. A defined contribution plan, such as a "401(k) plan," maintains separate accounts for each person and retirement benefits are based on the amount in your account.

Are you included in the plan?

Pension plans do not have to include every worker. Some jobs may be excluded from the plan and part-time workers may not be covered. Check with your plan administrator (the person running the plan), personnel office or union representative to make sure that you are a plan member or to find out how to become one.

Have you worked long enough to earn a pension?

Generally you must work five years under a plan to qualify for benefits, although some types of plans still require ten years of work to earn a benefit. Some plans require less than five years. Ask the person running your plan for a summary plan description which describes the plan and its requirements.

Do you know how much your pension will be?

The summary plan description should tell you how your benefit will be calculated. Your employer may give you or you may request an individual benefit statement showing the value of your pension benefit. The individual benefit statement should show the benefits you have actually earned to date and a projection of your benefit at retirement.

Do you know the Social Security benefits to which you may be entitled?

Your Social Security benefits will be based on your earnings during your working career. You may also be entitled to benefits as a spouse, ex-spouse, or widow based on your spouse's earnings. Periodically, you should verify that your earnings on file with the Social Security Administration are correct.

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Do you know what happens to your pension if you change jobs?

If you have not worked long enough to qualify for benefits, you will lose your pension. If you qualify for benefits, some plans will keep your pension until you reach retirement age. Others will allow you to take your money out in a lump sum. If you take the money, you will have to pay a tax penalty unless you roll the money over into another pension plan or IRA.

Do you know what happens to a pension if you or your spouse dies?

In a traditional private pension plan, you may be entitled to receive a benefit from your spouse's plan when he dies. This "survivor" benefit is automatic unless both spouses agree, in writing, to give it up. If you are in a government plan or a defined contribution plan the rules may be different.

Do you know what benefits your spouse's plan provides?

If you are a beneficiary under your spouse's pension plan, you may request a copy of a summary plan description from the plan administrator (generally the employer) which describes the plan, your rights under the plan, and whether survivor annuities or other death benefits are provided under the plan. You may also make a written request for copies of plan documents and a statement describing your spouse's vested benefits under the plan. There may be a charge for the information and your request may have to be in writing.

This website provides only a general overview of estate planning. You should consult an attorney, or perhaps a CPA or tax advisor for additional guidance.

Copyright 2005 by Estate and Retirement Planning
All Rights Reserved.