The Cost of Widowhood

They didn’t know what they didn’t know

Depressed Mid Adult Lonely Woman Crying In The Dark.

Regrettably, far too often wives or partners don’t discover just how far out of the loop they are until they lose their spouse and are left in the dark when it comes to their financial situation. They don’t have a clue how to manage their money, or even if they will have enough to live on comfortably and with dignity.  

Though more women these days are taking an active role in their family’s retirement planning and investing, there are still a great many seniors who belong to the generations where defined stereotypical gender roles were the norm in a marriage. It was the husband who was the primary bread winner and it was a man’s job to provide for her, plus he was the head of the household who made the decisions, especially when it came to money. 

“No need to worry your pretty little head about any of that, my dear” was the prevailing attitude. So they didn’t. 

Now they’re suffering the consequences. 

As statistics prove, women are three times as likely as men to outlive a spouse. Those left behind are finding that the loss of their life partner and best friend and the associated heartbreak, grief and sorrow isn’t the only blow. There’s the monetary shock as well, and it’s just as big of a jolt.

“Very few wives are prepared to be able to manage their finances if their husbands die,” writes Kerry Hannon, the senior columnist for Yahoo Finance and the author of the book “Suddenly Single: Money Skills for Divorcees and Widows.” 

In an article for, Hannon points to a study by Merrill Lynch/Age Wave, which revealed the stunning fact that only 14 percent of widows were making independent financial decisions before their spouse died. 

Even more concerning is that many who find themselves suddenly single are ignorant as to what assets they have, where they are located and how to gain access to them. The situation is particularly challenging when their spouse didn’t share bank and investment account information, statements, passwords, property deeds, or perhaps even the keys to the safety deposit box or the location of the will and other necessary legal documents.

Wait. It gets worse. 

“If your spouse was still working, you may lose much or all of your household income. You may go from two Social Security benefits down to one. Your tax rate may rise. You may lose access to credit cards you thought were yours but were established under your spouse’s name,” Linda Stern writes in the May 2020 Bulletin. “And if you’re widowed from a second marriage, your spouse’s assets may go to first-marriage children, not you.”

There are also pension and Social Security benefits, 401k rollover rules, federal, state and local tax codes, the capital gains tax on the sale of the primary residence, and other critical money matters to become educated about when there isn’t a lot of ramp-up time and the widow is likely consumed with grief, overcome by depression and completely overwhelmed.

At this terrible time when women are experiencing a tremendous loss, they’re in jeopardy of losing a lot of money too. Sadly, experts find that half of widows see their household income drop by half, a full 50 percent, after their spouse passes away.

“Women do not understand their Social Security benefits as well as they should. Many women rely heavily on Social Security as a leading source of income in their later years, yet most are not familiar with even the basic rules of spousal and survivor benefits, nor do they understand what the different options are for claiming Social Security that can greatly impact their benefit,” according to Laura Hinz, the director of programs for the nonprofit Women’s Institute for a Secure Retirement (WISER). 

Certified financial advisors and qualified tax accounts can be a big help, but WISER discovered that women are less likely to trust them and instead are more apt to rely on family or friends for financial advice. This isn’t wise.

“Even when a couple has a financial advisor, if the husband dies, the wife may not feel comfortable working with the advisor alone. This is especially true if the advisor does not give her the same level of attention or respect, or communicate in a way that resonates with her,” Hinz finds. 

Nevertheless, the situation doesn’t have to be doom and gloom. There are smart strategies to employ that will shield widows from the dangers and protect them from the pitfalls.

The best thing to do is plan ahead, plan ahead, and plan ahead. It is vitally important that even in marriages where the subject of money is touchy, if not outright taboo, women need to learn all they can about their household and personal finances while the husband is still living and before he becomes ill or incapacitated. 

Hannon and Maddy Dychtwald, co-founder and senior vice president of Age Wave, a visionary company addressing the far-reaching impacts of the aging population, advise in the article to make money talk part of the marriage. If this remains difficult or uncomfortable, they suggest bringing in a facilitator to help the discussion.

They also recommend that once a woman becomes a widow she hires a fee-only money manager who has earned certified financial planner credentials and can give her unbiased guidance.

“Relying on the financial expertise and clear headedness of others when you become a widow can be a big benefit to you. Asking for the help of people you trust helps you build that financial confidence. You take charge little by little,” says Dychtwald.

It’s also sensible to hit the pause button, not the panic button. Those who’ve walked in a widow’s shoes recommend she should take time to experience her grief, process the situation, and begin healing. And as long as she can afford it, they caution she shouldn’t rush into any major moves or make any big, life-altering decisions for a least one year. 

Says Hinz, at WISER, “We frequently hear from women who find themselves struggling financially after their husbands pass away; many of them saying, ‘If only I knew…” when it comes to financial matters.”

Tips for Financial Preparedness

Women are three times as likely as men to outlive their spouse or partner, so on average women will be on their own for one-third of their adult lives. This makes it imperative that they stay informed on money matters., the website for the Women’s Institute for Financial Education, suggests that every couple have what this group calls a “Contingency Day” at least once a year to talk about finances.

Here are 10 tips for the topics to cover in the conversation:

  1. How much is there?
  2. Is it enough?
  3. Where is it invested?
  4. What should be sold?
  5. Can I manage it myself?
  6. Who should I turn to for advice?
  7. Are all financial records updated?
  8. Does the will and/or trust need revision?
  9. Are funeral arrangements in place?
  10. Have we designed our financial education plan for the coming year?
Categories: Seniors