(Para leer la versión en español ir a Noticias Relacionadas).
Mother's Day provides the perfect opportunity to celebrate your love and appreciation for the moms in your life. So buys flowers and make dinner reservations, or whatever your custom is. But before too many days pass, schedule a "reality check" conversation about personal finances to make sure your mother is covering all her financial bases.
On average, women live about seven years longer than men and earn only about two-thirds as much. Plus, women often spend far fewer years in the workforce because of time taken off to raise children. So it's not surprising that many women have less income at retirement and need to make it last longer.
Here are a few topics you may want to cover:
Retirement savings come first. Although you can borrow money to pay for your children's college, a house or a car, you can't get a loan to pay for retirement. Make sure your mom has an IRA or 401(k) plan and is socking away as much as possible. The IRS even allows catch-up contributions for people over age 50. Check out the retirement planning tips at Visa Inc.'s Practical Money Skills for Life program http://www.practicalmoneyskills.com/retirement
Pension annuities. By law, the default pension payout option for married couples is a qualified joint and survivor annuity, where the surviving spouse continues drawing pension benefits after the pension holder's death. Some couples (with written permission only) instead choose a single life annuity because it pays a higher monthly benefit. However, once the pension holder dies, the spouse no longer receives benefits.
If your mother will depend on your father's pension, make sure they fully understand the implications before opting for a single life annuity. Also note that she may qualify for a pension benefit after divorce. If this wasn't spelled out in the divorce settlement, consult an attorney.
Social Security benefits. Because of lower average earnings and longer life expectancy, more women than men depend on Social Security for the lion's share of their retirement income. Even if your mother didn't pay into Social Security through work, she's eligible for benefits provided her spouse did. If your mom qualifies under her own work record as well as your dad's, she'll generally receive the higher benefit amount.
Widows can tap Social Security