Nothing can prepare someone for the emotional pain and grief widows face after the loss of a spouse.
For many women, the emotional devastation is frequently accompanied by new financial challenges they must now face alone. From my work with many clients whose partners have passed, I know firsthand how important it is for women to have a financial plan in place before the unthinkable happens. Being prepared can make the difference between hardship and having a solid foundation to move forward.
The findings from a recent Thrivent survey of widows underscore this harsh reality. A majority of widows surveyed (60%) said their spouse’s death was unexpected, but only 29% said they created a will while they were together. Fifty-one percent are living paycheck to paycheck or struggling with bills.
Much of this is due to a widespread lack of financial planning, and 41% of widowed women surveyed said they didn’t have any financial conversations or plans in place before their spouse's passing. Only 6% met regularly with a financial advisor and even fewer (5%) had a written financial strategy. This is why so many widows are unprepared to face their new financial realities.
Partnering With Purpose: The Role Of Financial Advisors For Couples
Widowhood is often unexpected and Thrivent’s survey results show an urgent need for preparation. Since very few couples have a plan in place, financial advisors need to proactively help their clients develop one.
Throughout my career, I’ve helped many women have the support they need immediately after the death of their spouse and in the years to come. Here are three ways financial advisors can encourage women (and their spouses) to start working on a plan.
1. Have the necessary conversations now. Thrivent’s survey found many women struggled with budgeting on a reduced household income (44%), managing and paying debt (37%), and continuing to save for retirement on one income (21%) following the loss of their spouse. This hardship can be lessened if couples have an open discussion about their current finances, their future goals, and end-of-life wishes. Financial advisors should also encourage couples to transparently share financial documents, records, and passwords with each other. This gives surviving spouses the information and clarity they need to make smart financial decisions.
2. Explain upcoming challenges and propose ways to address them. After losing a spouse, widowed women often encounter new and unexpected financial challenges. Thrivent’s survey found 35% of widowed women said they had to reduce or stop spending on non-essential items or activities, 14% had to pull money from retirement savings to cover expenses and 11% reduced or stopped contributing to savings. A financial advisor can help women map out short and long-term decisions and offer tailored advice that meets their needs, reducing confusion and stress.
3. Encourage clients to assemble a support team. Surprisingly, an estimated 70% of women end their relationship with their financial advisor within the first year after the death of a spouse. In my experience, this is the time when women require the most support. Couples should build an experienced team aligned with their values to help women through the difficult decisions in widowhood. Ideally, this team should have a financial advisor at the center, with support from an attorney and CPA to advise on legal and tax questions.
It's not uncommon for widows to suddenly discover how little they knew about their finances. I’ve seen how the resulting anxiety can amplify a woman’s grief. Fortunately, this fate isn’t written in stone and a couple can prepare together for life after the loss of a spouse. With the right plan in place, a widow can spend her time with loved ones and pursuing her passions while feeling secure about the future.
Teresa Powell is a financial advisor with the Liberty Team of Thrivent located in Howard County, Maryland. She works closely with widows and people from all walks of life as they navigate their financial futures.