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Dollars & Sense: Security for Moms

How many of you grew up with a mom who was impeccably dressed at the crack of dawn, white pearls and all? A mom that gently called up the stairs, “breakfast is ready, I’ve made all of your favorites”! And you would take your sleepy head downstairs following the smell of bacon and maple syrup just in time to see Mom in her apron pouring freshly squeezed orange juice and buttering your pancakes. It’s easy to picture June Cleaver, the consequential Mom of the 1950’s. How was she able to do all of those things for the boys and Ward? There was only one way and even though June was college educated, she chose motherhood as her full time career.

It probably didn’t make much financial sense for a Mom to work in 1960, especially when you think about the cost to raise a child from birth to age 18 was only $25,299 as compared to today’s projected cost of $226,290. For the household it made financial sense to have Mom stay home and provide care for the children. However, stay home Moms in the 1960’s forfeited more than their careers. They also forfeited financial security for themselves. They had no unemployment insurance to tide them over after a divorce, no workers’ compensation if they were injured and no Social Security benefits for the work they did, although even then, a housekeeper or nanny paid for the same work would have earned such benefits.

As a result of the high costs to raise a child most American families are now forced to have two incomes. But there were still obstacles for women who had careers and were expecting a child, there was a real risk of losing your job. In 1993 the Family and Medical Leave Act was put into law and included a provision that mandated 12 weeks of unpaid leave annually for mothers of newborn or newly adopted children. It also protects health insurance benefits while on maternity leave. In corporate America, The Medical Leave Act has expanded to include dads in the form of “family leave”. Family Leave benefits vary greatly with companies, for example Walmart offers 2 weeks paid leave, versus Facebook who generously offers 16 weeks of paid leave.

When it comes to retirement assets protection for spouses is inconsistent to say the least. Today, a 401k plan is often the largest asset that couples have. If the working spouse wants to name someone other than their spouse as the primary beneficiary, it now requires the worker to obtain a signature from their spouse. Unfortunately, this law does not apply to IRA accounts where you can have a non-spouse beneficiary without your spouse’s knowledge.   Pension plans now offer spousal protection to avoid the nasty surprise a widow might have when she realizes that her deceased spouse took a single life pension option, leaving her without any future income. Today, if you are married and you take any pension option other than a joint with survivorship, it requires the non-working spouse to sign off making them aware that there will not be any future income upon the death of the working spouse.

Non-working spouses will no doubt face financial challenges in retirement and should understand spousal benefit options for social security. They should also be taking advantage of non-working spousal IRA contributions (which also apply to ROTH IRA contributions if you are within the income limits) to have some financial security for their future.   Try to take a more active role when it comes to the retirement plans that the working spouse has in place as well as life insurance as a form of income replacement in the event of a premature death of the working spouse. There are very specific areas of planning when there is a stay home parent and all Mom’s, working or not, deserve financial security for their retirement years.   Happy Mother’s Day to all!

Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or

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