Women who are disengaged from their finances and leave long-term decisions to their spouses may be putting their future at risk. Retirement Director Sara Tegethoff Lowery shares lessons to be learned from a true story about a widow in her home state who was denied her late husband’s pension benefits.

There’s a story that’s local to Atlanta about a woman who wasn’t entitled to her husband’s pension after he suddenly passed away.

Hal and Janet were planning on doing some gardening in July of 2015. Hal told Janet to go ahead and get started in the yard. When Hal didn’t join his wife after what seemed like a very long time, she went inside to check on him and found that he’d suffered a massive heart attack, months shy of a scheduled retirement and at 66 years of age.

Janet and Hal had been married for 30 years. Hal was the primary breadwinner. Janet worked part-time in a dental office. They had no children. They were looking forward to life together in retirement.

Hal had plans to retire earlier, but a co-worker convinced him to stay on longer to complete a project they were working on. He agreed to another year of service, wanting to see the project to completion. But what Janet didn’t realize – and didn’t know whether her husband was aware – is that Hal’s pension documents contained a provision stating that the survivors of employees who pass away before retirement are not entitled to the employee’s pension.

Between 1987, when the provision was implemented, and 2016, 13 fully vested employees – Hal being one of them – passed away before retirement. (A vested employee is defined as someone whose age plus their time working for the city adds up to 80 years.) Hal had worked for the city for 20+ years, and the other dozen employees were also nearing retirement age.

In the end, the city council opted to follow the plan document to the letter and denied Janet any pension benefit. It’s possible that a dozen other heirs were also left without the pension benefit they had been counting on to enjoy a comfortable retirement.1

Get Involved: Start with Communication

Last month, my colleague, Marquette Payton, wrote an article about having tough conversations about what happens after a loved one dies. Janet and Hal’s story is just one example of why these conversations need to happen.

Speaking of those conversations, I had dinner at a friend’s house recently and she complained about the monthly meetings her husband asks her to participate in where they review their financial picture. I asked her why she didn’t like the meetings and she said that her husband handles everything, so she’s not worried about how their investment portfolio performs. She elaborated further and explained that she doesn’t think things change often enough to warrant a monthly meeting.

While I can understand my friend’s inclination to stand by and let her spouse take care of things, I honestly think her husband is doing her a real favor by making her talk about their finances and helping her get comfortable with their portfolio and his rationale behind their asset allocation. They are both in their 70s, and while they could both live another 25 years, there’s always the possibility that they won’t.

And of course my friend is not alone in her thinking: Research tells us that certain generations of women, Millennials in particular, tend to leave investment decision-making up to their spouses.2 I personally find this troubling. And I strongly believe that women need to do a better job of stepping up, speaking about their financial goals, asking questions around concepts they don’t understand, and inserting their opinion into the picture. Doing so can actually be healthy for a relationship: I read an article recently that said couples are happier when making financial decisions together.3

Get into Investing: Start with What You Know

Years ago, I read an article that offered suggestions for getting into investing. One idea proposed was to look at companies you frequently interact with – that could be Amazon, Peloton, Target, or even the toothpaste brand you use (the first three are all publicly traded companies, and your toothpaste company likely is, too). You can leverage the stock app on your phone to track the share price of each company.

As you’re tracking these companies’ share prices, take notice of things that are happening with their actual operations, such as poorly maintained stores, bad service, or empty shelves. These clues can provide insight on why a company may be performing at a higher level in terms of stock performance. In some respects, it’s what analysts at money management companies are doing on a daily basis. It’s actually quite interesting (and could be a big reason why I’m in this industry… put that female intuition to work!) But it’s also an easy way to dip your toe in the water of how portfolio managers manage portfolios.

Get Active with Your Retirement Plan

As for other steps, investing in your retirement plan is a critical one – and I always encourage people to take an active role. Review your statements and log on to the provider’s website regularly to check your balance. Cyberthieves have been targeting 401(k) accounts, so monitoring your account regularly can also help ensure there isn’t any unusual activity going on.

You may also consider taking a cue from my friend’s husband and schedule regular conversations with your spouse to discuss your financial position and the rationale behind your allocation. And get to know your financial advisor. If he/she isn’t receptive to engaging you, find a new advisor. Statistically, women survive their spouses, so chances are very good that you will have to make decisions related to finances on your own at some point in your life.

Going back to Janet and Hal’s story: Janet has said that at least current employees are aware of the pension rule that kept her from receiving her late husband’s benefits. She also says she trusted her husband and doesn’t think he knew about the provision. Her story serves as a lesson for all of us to better understand the fine print of our employee benefits. But it’s also an important lesson for women in particular to take a more involved role when it comes to financial planning – no matter what stage of life they are in.

 

1“A year later, Marietta still keeping widow’s pension.” Atlanta Journal-Constitution, July 2016.
2“Wealthy Millennial Women Tend to Defer to Husbands on Investing.” New York Times, October 2020.
3“UBS Own Your Worth report finds that only 20% of couples participate equally in financial decisions.” UBS, May 2021.