WHERE TO BEGIN?

Please don’t misunderstand the following recommendation. I strongly believe it is essential for a married woman to consider herself financially separate from her husband - all the more so if he supplies most of the family’s income and handles most of the financial decisions.

You must make a financial plan of your own to provide for the likelihood that eventually you’ll be managing your money independently.

To establish your own financial identity, the absolute minimum is to open personal checking and savings accounts and to obtain one or more credit cards in your name only. Why is this necessary? Because a woman whose assets are entirely tied up in joint accounts with her husband, and whose credit cards are all in her husband’s name, may face severe financial problems in the future.

If you become divorced or widowed, your credit history will be based entirely on your husband’s finances, not your own. You may learn, to your dismay, that you lack the financial standing to qualify for your own line of credit. When financial need strikes, this can be a devastating handicap.

Furthermore, any money held in a joint account with your husband may be frozen by the bank or financial institution upon his death, leaving you with no access to funds until after your husband’s estate is settled. And in the event of divorce, you may find that all jointly held funds are divided equally, even though you may have contributed more to some accounts.

Next, you should begin to develop an independent retirement plan, one not based on assumptions about your husband’s contributions. This may be an uphill struggle.

The U.S. retirement system depends largely on social security and private pension plans, both of which are directly tied to the number of years an individual has spent in the workplace.

However, the career patterns of women differ greatly from those of men, largely because of the time most women devote to raising their children but also because of other factors, such as willingness to relocate - and sacrificing their own seniority as employees - when their husbands’ career demands it.

As a result of these “liabilities,” working women often fail to remain on the job long enough to qualify for their own pension plan.

The point then is that married women, whether working outside the home or not, must plan for retirement independently of their husbands. You should develop your own savings and investment plan with a definite goal to be attained by retirement age. And, you should become as fully informed about your family’s finances as your husband.

Because women tend to have less money to invest, they’re often more fearful of taking losses. But presently we find ourselves in a low interest yielding environment that you may not be able to plan for the future based on savings accounts (rate in 2014 less than half a percent), CDs, money markets etc. I therefore believe that since you will have about 25 years in retirement, some part of your investment portfolio should be in stocks and bonds.

THOUGHT OF THE WEEK

“Friends are not jumper cables. You do not throw them into the trunk and pull them out for emergencies.”