Opinion - Invest in You: Ready. Set. Grow.

Recent widows need financial guidance after a spouse's death

Kathleen M. Rehl, financial planner and author
Key Points
  • Most married women will outlive their male spouse.
  • Half of widows over age 65 will outlive their husbands by 15 years.
  • Sometimes a widow's grief can lead to "brain freeze" but here are five tips for people struggling to get a grip on their finances amid the grieving process.
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Like millions of American women, I've experienced widowhood.

According to the U.S. Census Bureau, as of 2019, there were almost 15 million widows and widowers in the country. About 77% of these individuals, or 11.4 million, were women. (Some widowed people later remarry, so the total number of individuals experiencing widowhood is actually larger — after remarriage, they are no longer classified as widowed.)

I was devastated as a new widow. This heartbreaking event happens to almost 1 million women each year. My husband passed days after my 60th birthday. I fit the norm. The Census Bureau reports that the median age a wife becomes a widow is 59.4 for a first marriage and 60.3 for a second marriage.

It's a fact that women live longer than men. Indeed, half of widows over age 65 will outlive their husbands by 15 years. That means many years ahead to be responsible for personal and financial decisions.

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Making matters more complicated, the death of a spouse unleashes a deluge of financial tasks. Many widows aren't as familiar with investing, insurance policies, taxes or estate planning because, in many cases, their husband handled these financial matters.

Sadly, even when the widow managed the family money matters, she's likely to be engulfed in grief and despair at first. This can result in financial matters being placed on the back burner.

In early widowhood, a widow's grief can parallel what some have called a "brain freeze." For many new widows, memory is weak, attention span is short and decision-making is downright difficult.

I didn't remember my Social Security number. I couldn't recall where I put my car keys. I wondered if I was going crazy. But I wasn't. It was just a normal part of being a new widow in intense grief.

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Widows can face a double whammy after their husband's death if their knowledge of financial matters isn't strong and their emotions are raw.

Below are five suggestions for new widows after the death of a spouse:

1. Don't rush into major irrevocable money decisions right away. With important financial choices ahead, speed can make a mess of things. When you are in the midst of grief and mourning, your brain functions differently.

Wait until your cognitive functions return to normal to make big decisions. For example, don't buy or sell investments you don't understand. Rather, focus on financial triage activities. This includes reviewing your money flow situation, making sure bills are paid, filing for death benefits and maintaining enough cash liquidity.

Save major decisions for later. If you receive a life insurance death benefit check, deposit this in a safe money market account and think about how you need to use this money later before you invest, spend or give it.

2. Watch out for financial wolves who will prey on widows. Unscrupulous financial salespeople may take advantage of women after their spouse dies. My elderly widowed aunt was sold Iraqi dinars by "a nice young man" who was the nephew of her church friend.

That financial wolf convinced her to buy the Iraq currency. He told my aunt she would double her money with this investment, to earn much more than her certificates of deposit. In return for her cash, she received an official-looking signed "certificate of authenticity" along with the colorful dinar currency.

Consider getting unbiased guidance from someone who can evaluate your financial position and provide objective, comprehensive suggestions.
Kathleen M. Rehl
financial planner and author

But my aunt never received one penny back. She tried to contact this scam artist later, but he had skipped town ... obviously looking for other vulnerable widows elsewhere.

3. Make housing decisions carefully. Although it might be tempting to move in with an adult son or daughter across the country to ease your loneliness, don't leave your home and community right away. Your major support network, social circles, medical providers and maybe an employer are nearby.

Indeed, you might experience secondary grief if you relocate, following the grief you already feel after your husband's death. Some widows stay in their house and want to pay off the mortgage immediately with death benefits. Wait. Keep cash available for the near-term needs, while making decisions about your new life ahead.

4. Get an objective review of your finances. Family or friends may give you advice without knowing your entire situation. Practice saying, "Thanks for your suggestions. I'll take your ideas into consideration, but it's way too early for me to decide what my future will be."

Consider getting unbiased guidance from someone who can evaluate your financial position and provide objective, comprehensive suggestions. When you're thinking more clearly, you'll want to review your investments to determine what adjustments are needed. What may have been good for you and your spouse before might not be appropriate now.

Tom Merton

It's common for new widows to wonder if they will become "bag ladies," even if they've got plenty of money. A common question new widows ask is "Will I have enough?" Getting a realistic understanding of your financial net worth and looking at sources of cash coming in and going out will be helpful.

Some widows can benefit by speaking with a financial advisor about their situation. This qualified professional can be a "thinking partner," helping you make decisions — someone who listens with empathy and respect, whom you trust.

Your advisor should be experienced in working with widows and have an accepted professional designation. The most acknowledged credential is the certified financial planner, or CFP, status. Select an advisor who puts your interest first as he or she provides unbiased and holistic advice. Many experts recommend fee-compensated advisors.

5. Don't be a purse for others. Women may be approached by family members asking for part of their inheritance early. For example, one of my client's stepsons demanded that his father's widow give him money to buy a new car. He played on her emotions, saying, "If Dad were alive, he would help me now."

Don't give in to pressure like this. If you later decide to date again, be careful about potential partners looking for you to give them money or pay for expenses. Keep money matters to yourself, at least until you know the other person very well.

— By Kathleen M. Rehl, Ph.D., certified financial planner and author of "Moving Forward on Your Own: A Financial Guidebook for Widows."

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