It is a fact that women live longer than men. Scientists are not certain why exactly, but some believe it could be because of women's double-X redundant chromosomes, estrogen, or lots of other factors. The bottom line is that the population of widows is far greater than widowers.
The problem is that too many widows are unexpectedly thrust into a new life, sometimes unprepared to face the financial challenges of going at it alone. The death of a life partner is something no one wants to think about. However, proper financial planning and a realistic outlook can give both you and your spouse peace of mind. That planning also has the advantage of shoring up both your retirement incomes.
More women need to plan for widowhood as part of their financial and retirement strategy. Here are three reasons why.
1. Women can expect to outlive men by about 5 years
A higher life expectancy means a heterosexual married woman is more likely to become widowed, and at a relatively early age. For example, in 2019 the median age of widows was 59. About half of all widows over the age of 65 will outlive husbands by 15 years.
Those extra years are not just a footnote in a statistical table. They represent decades of living expenses, healthcare costs, and financial decisions that one person now has to manage alone. Planning for that reality today is one of the most important gifts you can give your future self.
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2. The death of a spouse is an enormous stressor
The death of a spouse is one of life's most devastating events. The stress, bewilderment, and deep sense of loss, anger, and isolation could lead to paralysis and indecision in facing new financial challenges, moving through grief, and being able to move forward in life.
When emotions are overwhelming, even routine decisions can feel impossible. That is exactly why having a clear financial framework in place beforehand matters so much. It removes the burden of making complex choices under duress and lets you focus on healing.
We help clients create financial roadmaps for life's hardest transitions. Reach out to learn more.
3. The average Social Security benefit is $1,422.69 a month for non-disabled widows
The poverty rate among elder widows is as much as three times higher than elderly married women. Many widows end up living on their own and need an independent retirement income.
So the new widow must plan ahead. Unexpected complications like probate, wills, and family disputes can heap additional stress and heartache on top of financial concerns. The time to address these issues is now, while you have the clarity and support to do it well.
What can women do to better prepare for widowhood?
Step 1: Organize your assets
Do not wait. Do this now, whatever your age. Gather up insurance policies, retirement plans, mortgage documents, and a list of debts. Write down the account numbers for your bank and broker. Do not forget your property deeds and titles, powers of attorney, passports, and birth and marriage certificates.
Do not store anything in a bank safe deposit box that you may need before final probate. Safe deposit boxes could be sealed by a probate court. Those vital documents could be inaccessible before the estate is settled. This advice goes double for wills, copies of which should be notarized and provided to family members.
Step 2: Run the numbers, make a budget, and grow your nest egg
Information gathering is the first step to knowing whether you will have enough money to get by after the death of a spouse. The numbers may tell you that you cannot support your current lifestyle if one of the paychecks stops or your Social Security benefit becomes less. Plan accordingly.
Get a handle on your current expenses versus income. If you are in your high-earning years and are now making more than you can spend, start thinking about putting that extra money to work. Look into additional savings and investment plans that you can convert to an additional pension, for example.
Get solid financial advice. If you have questions about how to prepare your estate, or if you need help navigating a succession, feel free to reach out with questions.
Looking for a practical place to start? Review our year-end tax planning checklist.