Each year, 1.4 million women become widows. In a new survey on widowhood
by Merrill Lynch and Age Wave, 78% of those surveyed described it as their
single most overwhelming and difficult life experience.
One reason for the struggle… like McKinney, many widows are
financially unprepared for life without their spouse.
According to the Merrill Lynch/Age Wave survey, following the death of a
spouse, half of widows experience a household income decline of 50%
or more.
And 76% of current married retirees surveyed said they would not be
financially prepared for retirement if their spouse passed.
Following the death of a spouse, half of widows experience a household income
decline of 50% or more. - Merrill Lynch and Age Wave
Part of the problem is that a generation ago, relying on a husband to be the
breadwinner and manage all financial matters was the norm for women, says
Danielle Howard, a certified financial planner in Basalt, Colo. who has worked
with numerous widows. “There is an age group of women that has abdicated
their financial role to their husbands.”
But even among couples who share financial responsibilities, there’s a
Reluctance to discuss the inevitable end of their union, says Colleen
Galambos, PhD, who chairs The National Association of Social Workers’
Aging Specialty Practice Section.
As a society, she says, “We avoid having the kinds of discussions that we
Need to have to prepare somebody for what is a natural life event.”
No amount of money, of course, can make up for the inevitable loneliness that
follows the passing of a longtime spouse. Yet the Merrill Lynch study also found
that people who are financially prepared fare much better in terms
of stress and grieving.
The following tips can help.
Create… and update… critical documents
All couples need to have a power of attorney, which designates another person
the right to make decisions pertaining to your finances, should you be unable to
do so, a will and a health care proxy, a document that names a trusted individual
to express your wishes and make health care decisions for you if you are unable
to speak for yourself.
In addition, make sure that all your accounts and policies name both spouses
as beneficiaries… this avoids having to go through probate, which is a time-
consuming process, says Lili Vasileff, a certified financial planner in Greenwich,
Conn. It also prevents unwelcome surprises that can happen in the case of
divorce, like if your husband neglected to update his beneficiary so his ex-wife
is named instead of you.
Know where to find the paperwork
Both you and your spouse should be able to easily access all your financial
information, including the names of service providers and account numbers.
Vasileff suggests creating a folder that includes a copy of every policy you own
as well as a list of beneficiaries, your power of attorney, medical directive, and
a copy of your will. You should also create a list of all financial accounts, where
they are located, passwords and the balance in each of them, and the location
and access to safety deposit boxes.
There should also be a list of outstanding debt that outlines to whom money is
owed, the balance and how to contact the lender. “You don’t want to risk having payments overlooked and going into default,” Vasileff says.
Get real about the impact
“Women tend to think finances will be taken care of without knowing how
it is being taken care of. That is dangerous for a lot of reasons,” says Vasileff.
And the reality is that becoming a widow often leads to a lower income stream,
said Michelle Buonincontri, a certified financial planner who provides financial
coaching services to women in transition. This is often due to a reduction or loss
in a pension, annuity, or a second social security income.
“You don’t want to risk having payments overlooked and going into default.”
Lili Vasileff, CFP
So it’s critical to estimate ahead of time what the impact of your spouses’ death
would be on your cash flow, and identify and discuss strategies to fill that gap,
Buonincontri says. For example, if your spouse is eligible for a pension, you may
want to opt for a joint and survivor spousal benefit, which offers a lower monthly
income, but also provides a benefit to a widowed spouse.
Depending on your age and health, it may also be worth buying life insurance
To protect against the loss of income, said Matt Chancey, a certified financial
planner at Claraphi Advisory Network in Tampa, Fla. But especially if your children
are grown, you may find that a smaller policy is sufficient.
Seek support
Especially the first months post-widowhood, you’re apt to be vulnerable…
both emotional and financially, says Vasileff. You may be dealing with a lot of
uncertainty surrounding your spouses’s estate or will, and ongoing expenses.
But if at all possible, put off making any big or difficult decisions at this time,
says Lisa Margeson, Managing Director, and Head of Retirement Client Experience
and Communications at Bank of America Merrill Lynch.
“Focus on near-term financial matters, such as payment of bills, and postpone discussion on complex or longer-term topics, where decisions may be driven
by emotion and high stress rather than careful thought,” she says.
Finally, do not neglect the emotional side. Galambos suggests joining a support
group of other widows, facilitated by an experienced grief counselor.
Sharing your struggles with those who are enduring the same type of journey…
or finding ways to connectwith loved ones… can make you feel less alone.
“Grief doesn’t resolve in a week or two or even years,” Galambos says.
“When the funeral is over and your last relative leaves and you are in your empty
house or apartment, you have connections you can reach out to.”
- Julie Halpert• November 27, 2018
https://www.hellawealth.com/blog/money/widow-finances/
Roselyn Sánchez's Message to the Life Insurance Industry
Have you heard the news?
Life Happens is collaborating with actress, producer, proud Puerto Rican
and mother, Roselyn Sanchez as our spokesperson for this year’s
Life Insurance Awareness Month (LIAM) campaign.
Partnering with Life Happens, Roselyn is delivering an important message
to Americans that getting life insurance is an easy decision to make for the
ones you love.
It is affordable and protects your family financially if something happens to you.
https://www.youtube.com/watch?v=4BqfiG4qUj4
If your spouse died today would YOU
Be financially prepared?
I would be happy to sit down with you
And review your current coverage
And suggest options available to help
YOU be prepared…
Hayden Childs, Agent
(205) 269-1382
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