I believe that marriage is one of the greatest experiences a person can have and staying happily married is one of the best achievements in life. As a married woman, one of the worst scenarios I can imagine is living life without my husband. But I need to ask myself the very same question that I ask all my female clients who are married, what if he goes first?
Are you financially ready?
Statistics have shown that 80–90% of women will be solely responsible for their finances at some point in their lives. Mostly because women typically outlive men by seven years. (National Center for Women and retirement research)
Last month, I had a couple of clients who lost their husbands. Both women are over fifty years old, but eighteen years apart. While both suffered the emotional shocks of losing a spouse, neither one will experience the financial shocks of widowhood. Why?
Both are prepared to handle their finances. Unfortunately, though, some women are not—and won’t be.
To plan or not to plan?
Household income for widows typically declines 37% after the death of a spouse. According to the US Census Bureau, the average age of widowhood is fifty-nine years old and women on average spend more than fifteen years as a widow. That’s why it’s imperative for women to plan ahead for the possibility of widowhood.
Here are ways to plan and prepare:
Step 1: Talk about money with your spouse.
It’s not too late to start discovering each other’s money mindset and true purpose for money. Often, women don’t like to talk about money, much less talk about the prospect of widowhood. But for some of us, widowhood is inevitable. Open discussion with your spouse is one way to ensure that you are both on the same page.
You may need to enlist the services of a financial professional (who is a fiduciary) to map out a clear, joint vision of your financial future. Make sure that both you and your spouse go to all the consulting sessions together.
Step 2: Get involved with all the financial decisions.
Some women abdicate small financial decisions and end up with a big surprise when their husband is gone. They find themselves scrambling to find all the pieces, where is the electric bill? What’s on autopay? What’s the password to our insurance? How much does that usually cost?
All these small decisions compound into one big tangle if left unchecked.
Women need to make sure they’re involved in the entire financial process so the tangle doesn’t become impossible to unwind.
Step 3: Educate yourself.
Ladies, it’s not too late to increase your financial literacy. Learning about finance will not only give you knowledge to make wise decisions, it will also give you greater comfort about your future.
Check out the paulwinkler.com website for many resources to increase your financial knowledge.
Take it slow, start with the basics. It can be fun to learn new topics, and I’ve found that it’s empowering too.
Step 4: Get organized.
Make a list of all your assets, including retirement plans and insurance policies. Prepare a separate list of all debts and account numbers. Gather all documents for deeds, titles, wills, powers of attorney, passports, birth/marriage certificates, and tax returns. Store these documents somewhere safe and accessible.
Do not put these items in a bank safe deposit box as it could be sealed by probate court. Consider a digital online vault or a fireproof safe.
Step 5: Take Action.
Don’t wait. Do this now!
Losing your husband is devastating, but it doesn’t mean you have to lose your financial future, too.
Step 6: Make the most of your time together.
Hopefully, you and your spouse will live a long life and pass away together peacefully holding hands at the end. Yes, that’s probably a fairytale. However, you can treasure the time you have left. Build memories, travel, have fun!
Look brightly toward the future knowing that you have planned well!
By Arlene Brown, ChFC, EA, CDFA, CLU
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*Advisory services offered through Paul Winkler, Inc. (‘PWI’), a Registered Investment Advisor. PWI does not provide tax or legal advice: please consult your tax or legal advisor regarding your particular situation. This information is provided for informational purposes only and should not be construed to be a solicitation for the purchase or sale of any securities. Information we provide on our website, and in our publications and social media, does not constitute a solicitation or offer to sell securities or investment advisory services, or a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the securities laws of such jurisdiction.