Your First Steps - IV

5. Create and agree on a will for you and your spouse or partner. Insurance is there for the unexpected, but death is a part of life. And as we plan for life, so should we plan for death. Make sure that wills are drawn up and that you have a notarized original copy, a lawyer has a copy, and that there’s a copy in a safe deposit box. (If you don’t have a safe deposit box, consider getting one.) Review and update your will every five years or when you acquire significant new assets.

While state laws vary, surviving wives usually inherit at least half of their husband’s estates. However, given the nature of the modern family, inheritance can be contested bystepchildren, children, siblings and even cousins. While a jointly owned house will automatically go to the partner who survives, no one wants to inherit the house only to find they cannot afford the taxes that go with it. It is very important to state clearly

whom you want to receive your property and possessions. If both parties die at the same time, a will is important to make sure that the surviving children are cared for, and that assets are fairly distributed among survivors.

6. Save, save, save! One reason for the high rate of poverty among older women is the lack of personal savings. According to the National Women’s 2005 Retirement Survey, many women admit to not saving enough for their retirement. When asked the question, “At the present time, do you feel that you are saving enough money for your retirement?” percent of women surveyed answered “No.” Among women of color, the figures are even higher—74 percent for both African American and Hispanic women. Many of these

women are well aware of the importance of retirement saving, but many are unable to save or are simply unaware of the steps to take. Albert Einstein once said, “The most powerful force in the universe is compound interest.” While the great physicist may have said it with a smile, for most of us,  compound interest is the greatest financial gift we will experience. When you sit down to pay the bills, try to pay yourself first. Every week, put something aside and watch your money grow. If you don’t have access to a retirement plan through work, you could put your money in a pre-tax savings account like an IRA. The nice thing about these accounts is that they will lower your overall tax burden.
It is important for you to put money aside on your own even if your husband is saving for his retirement. A recent survey revealed that female workers are more likely than males to say that a spouse is putting money aside in a retirement plan of his own, which indicates that many women intend to rely solely on their husbands to take care of their retirement. While you will most likely have access to your husband’s pension in the
event of his death, or a portion of it in case of divorce, it’s always a good idea to have some money in your own name. This will also help your asset base in the event that you want to buy a house following a divorce or the death of your spouse. A woman needs to have her own money, even a small amount, to cover living expenses if something disastrous should occur that adversely affects the family income.