A Widow’s Guide To Financial Security

By Scott McCord, AAMS®, BFA™

No one is ever prepared for the death of a spouse—even when it is expected after a long struggle with a deadly disease. It can be absolutely devastating to the remaining partner, who now faces day-to-day life without their other half.

For married heterosexual couples, chances are high that the husband will die years before the wife. In fact, women are three times more likely to experience the death of a spouse than men. (1) As if dealing with grief isn’t enough, older widows are particularly vulnerable to financial instability, as many have deferred decisions on financial matters to their husbands due to cultural norms.

So what exactly should a widow know about her finances after the death of a husband? As it turns out, there is a lot of information women need to know about financial security during widowhood. We at Anthem Financial have boiled down this information to four major points that widows should follow to obtain financial security in the event of their spouse’s death.

1. Know Your Sources Of Income

As many widows face a decline of income when their spouse dies, it is a good idea to identify all sources of income for the surviving spouse. Sources of income could include Social Security benefits, veteran benefits, employer pension plans, individual retirement accounts, life insurance, and 401(k) plans.

2. Make A New Household Budget

Upon the death of your spouse, your expenses and your income are likely going to change. So it is a good idea to gather all your financial documents together and make a new budget based on your monthly income and expenses.

Not sure where to start? That’s okay. After gathering information on your monthly income, take note of big expenses, such as a mortgage or car loans, and start tracking your daily expenses every day for a month. This will give you a good idea of how much money is going out and coming in.

3. Create A Financial Plan For Your Future

In general, women live five to six years longer than men, and in many couples, men tend to be a few years older than their wife. (2) The longer life span coupled with the age difference indicates that many women will outlive their partner for what could be a significant period of time. This trend underscores how important it is that women take an active role in designing a financial plan that takes into account their needs and years lived without their spouse.

In the event of a spouse’s death, the surviving partner needs to figure out how to make their money last for their lifetime. After looking at day-to-day expenses and income, create a financial plan that is projected for many years into the future. Many widows choose to invest a lump sum from a life insurance policy or retirement plan. Our team at Anthem Financial offers professional advice that can help you decide what works for you.

4. Healthcare

Most women 65 and older are insured by Medicare. (3) But it is important to note that Medicare does not cover all the costs of healthcare and it also does not pay for long-term care. Many couples choose to purchase private supplemental insurance coverage, commonly referred to as Medigap coverage, or long-term care coverage to supplement Medicare.

After the death of your spouse, it is important to notify the Social Security Administration and private insurers of your spouse’s death. Some premiums may be reduced, which will cut down on your monthly expenditures. If you did not purchase long-term care coverage as a couple, then you may want to consider purchasing it now.

We’re Here To Help

We know that losing your spouse can be one of the biggest challenges you face. Please let us know how we can assist you in creating a financially secure future. Schedule a free introductory meeting online or reach out to us at scott@anthem-financial.com or 309-214-0152 with any questions.

About Scott

Scott McCord is founder and Investment Advisor Representative at Anthem Financial, providing values-based financial advice as a fiduciary. With over 20 years of experience in the financial industry, Scott focuses on building long-term relationships with his clients so he can understand their unique values and guide them through the ups and downs of their financial lives, keeping them focused on their short-term and long-term financial goals. Scott has a bachelor’s degree in business management and accounting and holds the Behavioral Financial Advisor™ (BFA™) and Accredited Asset Management Specialist (AAMS®) certifications, the Series 7 and 66 licenses, as well as life, health, and disability income insurance licenses. Scott is married to his intellectual and spiritual ally, Heather, and together they have two beautiful children, their daughter, Meyer, and their son, Grady. When Scott is not focusing on his clients and family, he volunteers his time on the Peoria Public Schools Foundation board, Impact Peoria board, and Rotary of Downtown Peoria board. To learn more about Scott, connect with him on LinkedIn.

Investment Advisor Representative of and advisory services are offered through Independent Wealth Network, Inc. a Registered Investment Advisor. Anthem Financial is not affiliated with Independent Wealth Network, Inc.

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(1) https://www.wiserwomen.org/resources/widowhood-fact-sheets/going-it-alone-a-guide-for-widows/

(2) https://www.scientificamerican.com/article/why-women-live-longer/

(3) https://www.kff.org/womens-health-policy/fact-sheet/medicares-role-for-older-women/