Aging Options

Widows Face Special Financial Challenges, so Couples Need to Plan Ahead

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It’s difficult for a married couple to visualize what the future will be like when one spouse has passed away. After all, today you’re both healthy and looking forward to enjoying many years of retirement together – and God willing, that’s what will happen. Nevertheless, at some point it’s a virtual certainty that one of you will be living on alone, and if the survivor is the wife, she may be in for shock when she encounters the particular financial challenges facing widows in retirement.

Facing Retirement as a Widow

We found this article from Money magazine to be helpful in prompting a conversation about the need for couples to plan ahead for the day when the wife might be facing life as a widow. The article introduces a woman named Kathleen Rehl whose husband died when she was 60 and he was 72. Rehl told Money that, along with deep grief at her husband’s death, she felt profound fear about her own financial survival and that of her small business. “Me, a reasonably smart gal,” she says, “and I’m going bonkers over the money!”  What makes Rehl’s story doubly ironic is that she herself is a financial adviser. If someone as supposedly savvy as this woman could find herself afraid for her financial future, imagine the effect widowhood has on the average spouse.

As the Money article says, women have good reason to worry about finances in retirement. “At 15 percent, widows’ poverty rate is three times that of married women, according to new data from the Center for Retirement Research at Boston College.” As if to confirm our belief here at AgingOptions that all the elements of retirement are interconnected, the Money article points out that for many couples, health care expenses are a big trigger for their money problems. “Often, the couple dips deeply into their savings to care for the husband, who leaves a smaller reserve after his death,” the article says. “And Social Security payments often decline upon the death of the higher-earning spouse, reducing monthly influxes of cash. This leaves widows the double burden of increased financial responsibilities later in life and fewer resources to ensure their security.”

Couples Should Do an Annual “Dry Run”

According to the article, financial advisers suggest that couples do a “dry run” well ahead of time to see how well their finances will stack up should one or the other pass away.  Financial planner Susan Bradley calls this exercise “a fire drill once a year –- starting before retirement –- where [couples] outline the exact steps to take after one of them dies. This provides an opportunity to analyze how much money will be available, once the other is no longer around.”  Couples can determine how much cash the surviving spouse will have on hand and how long it will last, and they can develop a list of specific next steps to take to make certain the bills get paid, so there will be no expensive and complicated backlog of penalties or interest payments. This kind of dry run also provides some real emotional support: “it provides a checklist for you to turn to while you’re in mourning and perhaps not thinking clearly,” Money says.

An annual fire drill like this equips couples with a better understanding of where financial shortfalls might lie. For example, Money writes, the surviving spouse will experience a reduction in Social Security income. Assuming both spouses were drawing benefits, he or she will retain only the higher of the two checks that the spouses received, potentially cutting benefits 50 percent or more, according to the Center for Retirement Research. If the dry run shows that the surviving spouse will need extra funds to make ends meet, life insurance is one way to help make up the difference, but there are other options about which a qualified financial planner can advise you. Contact us at AgingOptions and we will recommend some names of trusted professional planners.

A Retirement Dashboard Puts the Mind at Ease

Rajiv Nagaich of AgingOptions points out that couples planning for their financial future, either together or after one has died, need a Retirement Dashboard. “This is a great tool,” says Rajiv. “The power of a Retirement Dashboard is that it lets a person or a couple see at a glance what their finances will look like in the future, and it shows them how to make adjustments in real time. They can see exactly what the results of their decisions today will be on their retirement future. In my opinion, if a couple wants to put their minds at ease and create better security in retirement, a Retirement Dashboard is absolutely essential.”

Come to a LifePlanning Seminar

Perhaps as you read about the financial challenges of widowhood, you’re thinking about your own parents.  Maybe the best thing you can do is to encourage them to start planning now for greater peace of mind in the future. This might include downsizing, purchasing long-term care insurance, and scheduling a family conference with you and your siblings while everyone is healthy. These are areas where the advice from the professionals at AgingOptions can certainly help. But we think the very best way to start planning for your own retirement, and also to launch a helpful conversation with your spouse, your parents, and your own adult kids, is for all of you to join Rajiv Nagaich at a free LifePlanning Seminar. We guarantee it will give you plenty to talk about and we predict lots of “lightbulb moments” concerning financial issues, housing questions, medical insurance strategies, legal matters, and family communication.

Click here for a calendar of upcoming seminars, and then register online for the event of your choice. Helping your parents in their old age, planning for own retirement future, and thinking ahead about all the “what-if” scenarios are all wise things to do – but make sure you have the proper guide on the journey.  AgingOptions can help you, your spouse, and your parents to “Age on!”

(originally reported at

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