The following post is from staff writer Melissa Batai
My mom has a friend, “Sue” who we’ve known for years, since I was in elementary school. From the time we knew her, Sue had a rocky marriage to “Peter.” The two were complete opposites in every way: Sue is loud, outgoing, and a spendthrift who loves to tell jokes and laugh. Peter is quiet, introverted, and a penny pincher. He likes to fade into the background and not be the center of attention.
Sue and Peter were married for nearly 35 rocky years until Peter, who drank a lot when they first married but turned into a full-fledged alcoholic over the years, had an affair. That was what finally prompted Sue to leave.
For their entire marriage, Peter was the breadwinner, often working overtime to support his family, while Sue was a stay-at-home mom who took care of their five children. Because Sue liked to spend, money was always tight.
After the divorce, Sue got a job as a cafeteria lady at the local elementary school making $12 an hour. She depended on spousal support from Peter to make ends meet. She also was entitled to part of his Social Security when he retired. The problem for Sue was that even though they were divorced, she was still dependent on him financially for monthly expenses and retirement.
After they divorced, Peter’s drinking continued to spiral out of control until he was given an ultimatum at work–either get fired or retire early. He opted to retire early, and two things happened. His retirement was substantially smaller than anticipated because he retired in his early 50s and he was no longer contributing to Social Security, so that would also be smaller than anticipated.
Meanwhile, because he was no longer bringing in an income, his spousal support to Sue greatly diminished.
In hindsight, Sue should have probably left Peter much earlier in their marriage. However, she had 5 kids to raise and doing so as a single mother wouldn’t have been easy.
But because she entered the workforce in her mid-fifties after 35 years at home, she has trouble making a living wage. In addition, her retirement from Peter is fairly small.
Looking at Sue’s situation, I realize that every woman, especially a stay-at-home mom, should have her own retirement account. Had Sue and Peter set aside money for Sue in a Roth IRA while she stayed home with their children, she would be in a much better financial situation than she is currently. Sure, she would have had to split the retirement account with Peter, but she would have been in control of the savings, unlike relying on Peter’s retirement savings from his job.
Most couples don’t anticipate getting divorced. However, setting aside money in a separate retirement account is a smart move for a woman who is financially dependent on her husband.
My Question for You
Do you think every woman should have her own retirement account separate from her husband? Have you known other couples in situations similar to Sue and Peter’s?
My viewpoint on this is a bit different. I think that ideally, couples should pool marital assets together and go “all in” together.
Beyond that, I don’t think there is any reason why women have special needs for separate bank accounts than men do. The reason is that both men and women can work, and that there could also be men relying on female breadwinners, stay at home dads, etc. The same logic in the post above could absolutely apply to the men in those such situations needing their own separate accounts.
The bottom line is that I don’t agree with the distinction that women have an extra special need for separate accounts from their spouses vs. what men need, in 2014. I realize this could be a hot button topic, and am curious about what you the reader thinks about it.