Preparing for the Financial Reality of Widowhood
It’s quite a well-known fact that women outlive men. According to the National Center for Life Expectancy, women live an average of 81.1 years while men live an average of 76.1 years. Married women, therefore, can expect to live a full five years longer than their spouse.
What happens financially during the five years of widowhood? Many women will be in for a financial shock because they are not involved in their household finances during the time that they are married. Money can be a touchy subject for many couples especially for older generations where men have traditionally “provided for the family” and women stayed at home.
A survey by Merrill Lynch and Wave Age found that only 14% of women were making financial decisions by themselves before their spouse died. If your spouse died, would you know what to do? Where to start? Where to find important information about bank accounts? Would you be able to pay the bills?
If you are an older woman, here are ten tips to help you prepare:
- Learn about your finances while your spouse is still alive.
- Have conversations about money. How much do you have and where is it kept? Keep good records of all bank accounts and investments. You don’t want to lose track of your financial resources.
- Become involved in financial decisions and paying the bills. Do you know what it takes to run your household each month? When bills are due? How are they being paid?
- Visit the bank together. Make sure your name is on all accounts and you have access to everything you will need to manage on your own.
- Attend seminars, read books and do your own research to acquire some much-needed knowledge and skills. Don’t bury your head and pretend as if you don’t need to know because your husband manages the money.
- Have a plan for what will happen if your spouse passes away.
- Visit a lawyer and get an up-to-date will and estate plan prepared.
- Check beneficiary designations on life insurance, bank accounts and real estate.
- Establish a team of reliable and trust worthy professionals such as a financial planner, attorney, and accountant that you will be able to turn to for advice during your time of need.
- Don’t make any fast decisions while you’re grieving. Now is not the time to sell your home or cash in all your investments. Give yourself a full year before making any changes that will significantly impact your life.
Don’t wait until you’re a widow to figure out what you need to know to manage your income and expenses. Many women will experience a decline in household income after the death of their spouse, so you want to take steps now to help maintain your financial independence. By doing so, you will be able to focus on taking care of yourself and getting through one of the most difficult times in your life knowing you can support yourself and your finances are secure.
Questions about estate planning? Takacs McGinnis Elder Care Law may be able to help. Just give us a call at 615.824.2571.