By Michael C. Tow, Certified Financial Planner ™
Losing a spouse can be one of the worst things that can happen in someone’s life. Along with the grief, and reality of a different way of life, the issue of losing a spouse also raises financial issues, which can add to the already overwhelming traumatic experience. More often than not, it is a woman who is taking them on.
According to the National Center for Women and Retirement Research:
Nine out of ten women will be responsible for their own finances at some point in their lives.
Over 75 percent of the women in the United States are widowed at an average age of 56, and one-fourth of them will be broke within two months of their husband’s death.
Only 15 percent of the women who are married or living with a significant other assume responsibility for their retirement planning.
Almost 90 percent of the elderly living in poverty today are female.
Many widows who have just lost a spouse are overwhelmed with everything it takes to get their affairs in order and because of that they can be vulnerable and unwise decisions can be made. Here are some recommendations that may help during this difficult time.
Delay any major decisions
People often rush through decisions, such as selling their homes or purchasing investment holdings, shortly after the death of their spouse. Because the grief is so painful many just want to get it all over with. Certain bills and funeral expenses need to be taken care of relatively quickly, but most other moves can wait. Please do not make any changes right away. Learn what you can about your finances and keep the bills up to date. But don’t make major life changes like moving or job changes.
Many widows want to reduce as much hassle and bills as they can and a common reaction is to want to pay off the mortgage. This ultimately may be the right answer but it also could cause major liquidity issues if you don’t have a clear view of your financial picture.
Make an inventory of all assets
When things have settled a bit, the next area to try to focus on is on gathering, organizing and making an inventory of all assets and liabilities.
You will need to get control of the household bills if you weren’t paying them previously. Also you will need to collect and organize your and your husband’s financial and personal assets, including:
Bank and investment accounts, Safety Deposit Boxes, life insurance and other accidental or sudden death benefits, Social Security survivor benefits, annuity benefits, pensions , etc.
If you have trusted advisors like attorneys, accountants or Certified Financial Planners, contact them to see if there are other assets that you did not account for.
Develop a financial plan
Once you think you have gone through all of the accounting of your assets and the time is right, you’ll eventually want to create a financial plan tailored to you. This may be best in conjunction with a family member and trusted advisor but don’t be pressured because remember this needs to feel right for you.
Your life may feel in complete disarray right now, but I know you have the strength to get through this and in time you will be amazed at how resilient you can be.
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