The death of a husband or wife often means financial matters, such as bank account information, insurance policies and credit card debt, suddenly become the sole responsibility of the surviving spouse. In addition, a widow or widower has to worry about funeral costs.
Roughly 35 percent of marriages end in widowhood, most often with the death of the husband, and the average age of widowhood is 59 years old.
Financial Consequences of Widowhood
Researchers say 80 percent of women are alone in their final years of life, many for as long as 15 to 20 years.
Women often suffer specific economic losses upon the death of their husbands because of funeral and medical expenses. And widowhood in general can put some women at risk of financial strain or poverty. Historically, the poverty rates for widows have been two to three times higher than those for married women.
Half of the 246 widows aged 70 and younger who responded to a 2013 survey from the Women’s Institute for a Secure Retirement reported losing at least 50 percent of their income when their husbands died. Approximately an eighth of the respondents were forced to move to less expensive housing, and nearly half were concerned about making financial decisions.
Other findings from the survey included:
- Twenty-nine percent of the widows surveyed did not have emergency funds.
- Of those surveyed, 37 percent reported difficulty determining the Social Security benefits they were entitled to and how to receive them.
- Accessing bank accounts and investments after their husbands died was difficult for 27 percent of respondents.
The women surveyed had all become widowed within the five years prior to completing the survey and had financial assets valued from $50,000 to $1 million.
Improving Outlook, But Still Falling Short
The good news is that over the last few decades, poverty has fallen considerably among widows. According to a 2018 study from the Center for Retirement Research at Boston College, the average poverty rate among widows fell from 20 percent in 1994 to 13 percent in 2014. To be considered poverty level, a single person 65 years old or older must earn $11,756 a year or less. The researchers expect these rates to continue to fall over the next 15 years.
A steady rise in women’s participation in the labor force is partly responsible for the improved outlook. This has left women less financially dependent on their husbands. Women are also better educated and earn higher salaries than in years past.
Single women generally fare much worse than married women in terms of retirement finances. However, widowed women between the ages of 51 and 64 generally have a greater number of assets than do divorced women or women who were never married, the researchers reported.
Despite the improvements for widows, their picture is still much bleaker than that of women whose spouses are alive. The poverty rate for women with living spouses is 2.6 percent, as compared with the 13 percent poverty rate for widows.
How to Approach Your Finances After a Spouse Dies
Widows can take steps to improve their chances of financial security. FINRA, the Financial Industry Regulatory Authority, has compiled money tips for widows and widowers.
One of the most useful tips may be to give yourself a break and allow yourself time to grieve and adjust to your new life without your spouse. FINRA suggests taking care of only the most pressing financial issues in the time immediately following the death of a spouse.
This is a stressful time, and your ability to make sound decisions may be compromised. So it’s advised that you consider only what can’t be postponed, such as how much you can afford for a funeral.
As author and financial planner Eleanor Blayney told the New York Times, “There’s a sense of urgency to do something right after you lose a spouse, but I caution widows to recognize the psychological trauma and don’t do anything hastily.”
In general, financial planners suggest avoiding major investments or spending for at least six months.
Social Security and Other Benefits
According to the Social Security Administration, in addition to the potential qualification for a $255 death benefit, widows and widowers aged 60 or older — aged 50 or older, if they are disabled — are eligible for a percentage of the deceased spouses’ Social Security benefits.
You must visit a Social Security office in person to apply for survivor benefits. You can make an appointment by calling ahead. Make sure you bring originals of all the documents you need, including your spouse’s death and birth certificates, your marriage certificate and proof of U.S. citizenship. You may bring copies of a W-2 form or tax returns for self-employment.
If your spouse was collecting Social Security benefits, do not cash the checks sent to your spouse after his or her death. This money will have to be returned to the government.
Explore other benefits as well. For example, if your spouse had a structured settlement from a personal injury claim, you may be eligible for a death benefit.
And you can contact his or her employer to inquire whether a term life insurance policy was included as part of an employer-sponsored benefits package. Often spouses are unaware that these policies exist.
If your spouse served in the military, you will want to contact the VA to find out if you are eligible for survivor benefits.
Don’t make any irrevocable financial decisions, such as paying off your mortgage or making large gifts to family members or charities, soon after your spouse’s death. Take the time to evaluate each of these decisions. Work with a trusted advisor who can help you assess the impact of these moves.
If you decide to sell your home, consult a tax professional about how much of the sale profits you can exclude from your taxes.
Experts from FINRA, Wealthcare for Women, CNBC and The New York Times offer other financial tips for widows and widowers.
- Be on the lookout for scams.
- Single seniors are vulnerable to being exploited by fraudsters.
- Tally up your available cash.
- As soon as you can, make a list of all the accounts in both your and your spouse’s names. Include the balances, locations and how to access each account. Make sure to note any cash that is going into each account.
- Review your joint tax returns for the past five years.
- These may provide financial information from savings and brokerage accounts that can help you piece together your present situation.
- Consider joining a widows’ support group.
- Members of these groups can help each other navigate financial challenges.
- Cancel payments for your spouse’s subscriptions and memberships.
- This includes things like gym memberships, subscriptions to professional journals and magazines and any clubs or professional association memberships.
- When you’re ready, commit to learning more about personal finances.
- Look for books written for beginners, short videos and online courses.
Most importantly, give yourself time to grieve and time to heal. Surround yourself with a support system of family, friends and trusted professionals who have your best interests at heart. Allow them to help you manage the immediate financial matters, and defer long-term decisions until you feel mentally and emotionally ready to handle them.
16 Cited Research Articles
- FINRA. (2017, February 8). Managing Money Through Grief: 10 Tips for Widows and Widowers. Retrieved from: http://www.finra.org/investors/managing-money-through-grief-10-tips-widows-and-widowers
- Hannon, K. (2016, February 19). Financial Guidance for Widows Struggling Through Grief’s Fog. Retrieved from https://www.nytimes.com/2016/02/20/your-money/financial-guidance-for-widows-struggling-through-griefs-fog.html
- Hinz, L. (2014). Impact of Retirement Risk on Women. Retrieved from https://www.soa.org/globalassets/assets/Files/Research/Projects/research-2013-impact-retire-risks-women.pdf
- Jordan, C. (2017, October 31). Widows with wealth: Managing money after losing a spouse. Retrieved from https://www.cnbc.com/2017/10/31/widows-with-wealth-managing-money-after-losing-a-spouse.html
- LaGorce, T. (2018. November 17). Widows Are Faring Better Financially. Here’s Why. Retrieved from https://www.nytimes.com/2018/11/17/business/widows-financial-independence.html
- MassMutual. (2017, September 7). Women are Three Times More Likely than Men to Report They Can’t Afford to Save for Retirement, Mass Mutual Study Finds. Retrieved from https://www.massmutual.com/about-us/news-and-press-releases/press-releases/2017/09/06/15/45/women-are-three-times-more-likely-than-men-to-report-they-cant-afford-to-save-for-retirement
- Munnell, A. H. et al. (2018, May). What Factors Explain the Decline in Widows’ Poverty? Retrieved from http://crr.bc.edu/wp-content/uploads/2018/05/wp_2018-4.pdf
- Polyak, I. (2014, July 10). Widows: Don’t let grief cloud financial judgment. Retrieved from https://www.cnbc.com/2014/07/10/widows-dont-let-grief-cloud-financial-judgment.html
- Rehl, K.M. (n.d.). Empowering Widows Financially. Retrieved from http://www.kathleenrehl.com/
- Rehl, K.M. et al. (2017, April). Helping Repartnered Widows Navigate Romance and Finance: The Role of Financial Advice. Retrieved from http://users.neo.registeredsite.com/4/0/9/12469904/assets/2017.05_JFSP_Helpling_Repartnered_Widows_Navigate_Romance_and_Finance.pdf
- Social Security Administration. (n.d.). Benefits Planner: Life Expectancy. Retrieved from https://www.ssa.gov/planners/lifeexpectancy.html
- Stastista. (2018) Marital status of the U.S. Population in 2019 by sex (in millions). Retrieved from https://www.statista.com/statistics/242030/marital-status-of-the-us-population-by-sex/
- Thornton, R. (2018, January 23). 7 Financial Tips for Your First Year as a Widow. Retrieved from https://wealthcareforwomen.com/widow-first-year/
- University of Michigan. (2017, January). Aging in the 21st Century. Retrieved from http://hrsonline.isr.umich.edu/sitedocs/databook/?page=1
- Women’s Institute for a Secure Retirement. (2013). The Financial Impact of Widowhood. Retrieved from https://www.wiserwomen.org/news/the-financial-impact-of-widowhood/
- Women’s Institute for a Secure Retirement. (n.d.). Widows and Widowhood. Retrieved from https://www.wiserwomen.org/index.php?id=277&page=widows-and-widowhood