Retirement Bill Mandates Spousal Consent for 401(k) Withdrawals, Funds $200 Million for Women's Financial Literacy

The Women's Retirement Protection Act is designed to tackle a critical issue: the retirement savings gap that disproportionately affects women due to lower lifetime earnings and higher rates of part-time work. This legislation focuses on two main strategies: tightening legal protections around family retirement assets and pouring significant federal funding into financial education.

Your 401(k) Just Got More Complicated (and Safer)

The biggest change for everyday workers is found in Section 3, which significantly expands spousal protection for defined contribution plans—think 401(k)s and similar accounts. Currently, many of these plans allow participants to take distributions or change beneficiaries without their spouse’s consent. This bill changes that, mandating spousal consent for distributions and beneficiary changes in plans not already covered by existing federal protection laws (ERISA Section 205).

What does this mean for you? If you’re married, you can no longer unilaterally drain your retirement account or change your beneficiary without your spouse signing off on it. The plan administrator must provide a written explanation of both spouses’ rights and obtain written consent, witnessed by a notary or plan representative, within 90 days of the transaction. This is a massive win for financial security, especially in divorce scenarios, where retirement savings are often the largest asset after the house. It makes it much harder for one spouse to hide or liquidate assets before they can be divided fairly.

There are a few exceptions, however. You don’t need consent for required minimum distributions, or if the withdrawal is less than 25% of the account balance (but you only get to use that small withdrawal exception once per account). Crucially, if you want to take a full distribution without your spouse’s signature, you can only do so if 50% of the benefit is immediately rolled over into an Individual Retirement Account (IRA) set up for the spouse. This exception ensures that at least half the money is protected and transferred directly to the other party, treating the spouse as an owner rather than just a beneficiary.

$200 Million to Close the Knowledge Gap

Sections 6 and 7 establish two new, substantial federal grant programs, each authorized for $100 million annually starting in fiscal year 2026, to be administered by the Department of Labor’s Women's Bureau. This is a serious investment in financial literacy.

Section 6 funds competitive grants for community-based organizations to create and run financial literacy programs specifically targeting working and retired women. This goes beyond basic budgeting and includes complex topics like retirement planning and consumer issues. If you’re a woman looking to get a better handle on your finances, these grants should translate into more accessible, high-quality local programs near you.

Section 7 addresses a very specific, painful problem: dividing retirement assets during a divorce. It creates a separate $100 million grant program to help low-income women and survivors of domestic violence obtain and enforce Qualified Domestic Relations Orders (QDROs). QDROs are the complex legal documents required to split retirement assets, and the fees and legal expertise needed to secure them can be a huge barrier. This funding will help groups provide direct assistance, ensuring vulnerable women actually receive the retirement benefits they are legally owed.

Connecting You to the Facts

Finally, Section 5 introduces a straightforward consumer protection measure. Whenever a financial service provider tries to sell you a retirement product (like an IRA or annuity), they must provide an easy-to-find link to the Consumer Financial Protection Bureau (CFPB) website. This link will direct you to unbiased, government-produced guides and tools on retirement planning. The idea is to make sure that when you’re presented with a sales pitch, you also get immediate access to objective information, helping you make a more informed decision before signing on the dotted line.