Women And Retirement Savings Printer Friendly Version PDF Version Planning and saving for retirement may seem like goals that are far in the future. Yet saving, especially for retirement, should start early and continue throughout your lifetime. Here are four reasons why saving matters to women – and especially to you! Do You Know?
Start Here...Start Now Here are eight questions to help you think about retirement and take charge of your financial future: Do you work for an employer that offers
a retirement plan? Remember, by saving early you have time on your side. Your savings will grow and your earnings will compound over time. Have you worked at the job long enough
to earn retirement benefits? Too often employees, especially women, quit work, transfer to another job, or interrupt their work lives just short of the time required to become vested. Ask the personnel office, retirement plan administrator, or union representative about the vesting period and other details of your company’s plan. Do you keep copies of the documents
that define the provisions of your retirement plan? What happens to your retirement benefits if you change jobs? A word of caution: If you receive your retirement benefits in a lump sum, you will owe additional income taxes, and may owe a penalty tax. A better way is to reinvest your savings in another qualified retirement plan or an Individual Retirement Account (IRA) within 60 days. You avoid tax penalties and you keep your long-term retirement goals on track. If you do want to reinvest the money, it is important that you do not directly receive it. If you receive the money directly, you will have to pay a 20 percent withholding tax on the amount you receive and then file for a refund in the next year, providing proof that you have transferred the funds to an IRA. Instead, instruct the retirement plan to transfer your money directly to an IRA you have established or to another qualified retirement plan. This is easy to do using simple forms supplied by the new plan. If you want help with the forms, representatives of the plan are generally available to assist you. Do you know how you can save for
retirement even if you don’t belong to an employer-sponsored retirement plan?
As with other retirement savings plans, there may be tax consequences, and
possibly penalties, if you withdraw your savings early.
Are you tracking your Social Security
earnings?
To calculate your benefit estimate, visit the Social
Security Administration’s Web site.
Are you entitled to a portion of your
spouse’s retirement benefit if you and your husband divorce? Are you aware of the rules that govern
your retirement plan and the retirement plan of your spouse if either of you dies? If you or your spouse belong to a defined benefit plan (a traditional pension plan), the surviving spouse may be entitled to receive a survivor benefit when the enrolled employee dies. This survivor benefit is automatic unless both spouses agree, in writing, to forfeit the benefit. You will need to check the SPD or consult with the plan administrator regarding survivor annuities or other death benefits. If you are a beneficiary under your spouse’s defined benefit pension plan, you may want to request a copy of the SPD and other plan documents that describe your spouse’s vested benefits. You will probably want to make the request in writing, and you may be charged a fee for the information. The rules may be different if you or your spouse participate in a defined contribution plan (such as a 401(k) plan). Consult the plan administrator for details about spousal rights. It's Up to You Once you’ve answered these questions, you’re on the road to learning more about financial freedom. As a resource for women (and men), the Employee Benefits Security Administration has issued Savings Fitness: A Guide to Your Money and Your Financial Future and Taking the Mystery Out of Retirement Planning. The booklets include resources and Web site sections (see the Resources section to get a copy). Resources U.S. Department of Labor View the following booklets on the Web site. Request copies by calling the publication request line.
In addition, visit the following Web sites for more help:
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