Suddenly Single: Financial Planning for the Newly Widowed

Women are more than twice as likely as men to lose a spouse to death. Learn how to move forward with your finances if you’re recently widowed.

Print
https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Funeral flowers: Financial advice for the recently widowed
5 min read

Women are more than twice as likely as men to lose a spouse to death. For every 1,000 Americans in a given year, 7.8 women become widows, versus 3.5 for men, according to the U.S. Census Bureau (based on 2009). Women tend to live longer than men and often marry older men, which means they may live alone in later years. Some widows may not have managed family finances before. On top of grieving the loss of a loved one, the burden of navigating a myriad of money issues can be overwhelming.

Many marriages thrive on a division of labor, says Derek C. Hamilton, certified financial planner at Elser Financial Planning, Inc. "When the worst happens, the 'non-financial' spouse may suddenly find him or herself in foreign territory without a map. Aside from the overwhelming grief of losing a spouse, coming to grips with the financial aspects of being newly single can leave you feeling ignorant, confused, and vulnerable," Hamilton says.

First: Take Care of Yourself

If you are recently widowed, recognize that you are exhausted and not thinking clearly, says Susan Fulton, founder and principal at FBB Capital Partners. "Sleep, rest, and be with people who love you."

Once you are ready to begin sifting through the mountains of paper that are accumulating on the dining room table, consider this advice: try to avoid making any quick decisions or changes.

"The worst financial decisions are made when people feel they are in the midst of a crisis or in despair about the future, and that’s where many widows find themselves. Investments should be changed only with a plan, a true assessment of comfort level, and never in a highly emotional state. On the other hand, money shouldn’t sit in a checking account for years. As I tell my clients, you still have a life. It’s different from the life you had in the past, but it’s still a life," says Danielle L. Schultz, certified financial planner and principal of Haven Financial Solutions.

Next Steps

Get plenty of death certificate copies. "Every investment and insurance company is probably going to require them," Schultz says. Then, notify Social Security.

"You are entitled to a very small death benefit, and if your spouse’s Social Security payment was higher than yours, switch to your survivor’s benefit," Schultz says. "Every time I give a talk on Social Security, someone either starts crying in the audience or comes up to me distraught afterwards because either they or their mom didn’t know this and has been collecting only their own much smaller benefit for years. If you miss it, it’s not retroactive—you only get it from the time you file a claim."

Next, figure out what you actually own. Are there any insurance policies? "Some of these can be in the bottom of a drawer for years—purchased long ago when insurance was one of the few available investments that the general public could purchase. Don’t reinvest these until you get a chance to formulate your overall plan. Many insurance companies will offer to put them in a money market account for you. Be sure you know what the withdrawal rules are. There’s nothing wrong with putting cash into a savings account until you’re ready to deal with it," Schultz says.

Understand Your Rights and Obligations

Credit card companies and other lenders often try to talk the recently widowed into assuming the debts of a late spouse, Hamilton warns. "Don't do it before speaking with an estate attorney who can explain what your obligations are and what they’re not. You may not have to pay," he says.

Then take a hard look at the numbers. Evaluate how your living expenses may change now that you’re single again. "With new goals and needs, you may find expenses you can cut, while making life easier and happier,” Hamilton says.

Try to find the right balance with budgeting. Comfortable, sustainable spending is the goal, Hamilton says. "Over and under-spending can both be ugly. Don’t feel you have to pre-plan where every dollar goes, but find a good balance where you’re spending enough to meet your true needs and allowing you to express your true self while allowing ‘future you’ to do the same," Hamilton advises.

Moving Forward

Take a hard look at your home. "Your home is only an asset if you are willing to sell it. Otherwise it is a store of value, maybe. Even if it is paid for, maintenance and taxes will continue to deplete your investment base. You most likely want to keep it for a year or two while you settle into your new position. This is the biggest financial trap for women. We think it is a safety net, and it is really a Venus fly trap. Try to be objective about where you are and where you want to be," Fulton says.

Hamilton adds, “I’ve had clients who found great relief downsizing to a home or rental that’s easier to maintain in a community that’s more accessible to family and friends."

Remember that it’s okay to ask a lot of questions. Be sure you understand any financial moves you’re making. This includes being smart about taxes. "Your financial advisor, accountant, and attorney may all be able to assist you with tax-savings moves. The advice of these professionals is perhaps never more valuable than when you find yourself suddenly single," Hamilton says.

And last but not least, make sure to address your own health and well-being. "This is probably the time to get your hair and nails done, get a makeup renewal, just anything that is self-care and forward looking and gets you out of the house for something that just might be pleasurable. When there’s such a loss, there’s a temptation not to want to be alive yourself, so you have to reconnect with the world of the healthy living," Schultz says. 

Guidance: There When You Need It

With people and tools for support along the way, see how our 4-step approach to guidance can help you invest the way you want.

The information presented is for informational and educational purposes only. Content presented is not an investment recommendation or advice and should not be relied upon in making the decision to buy or sell a security or pursue a particular investment strategy.

Call Us
800-454-9272

TD Ameritrade, Inc. and all third parties mentioned are separate and unaffiliated and not responsible for each other's policies or services.

adChoicesAdChoices

Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2018 TD Ameritrade.

Scroll to Top