Widows Face Special Issues In Financial Planning

Close-up of documentsMany older couples, those approaching or even well past retirement age, have wisely made financial plans for the rest of their lives together.

What few do, because it’s just too emotionally difficult in most cases, is make further plans for one or the other of them to carry on alone.

More often than not, it is going to be the woman who survives in a married couple, and women face much more difficulty in planning for a secure future, as noted in a recent article in The New York Times.

“The household income for widows typically declines 37 percent after a spouse dies, far more than the 22 percent income drop that men experience, according to government figures,” the story stated . “The assets of widows also tend to fall substantially more than widowers’.

“Women also typically live longer than men. One in four women from 65 to 74 are widows, according to census figures. When women reach 85, three out of four are widows.”

“Many people do not plan for income needs after the first death in a couple,” David Littell, program director of the American College of Financial Services, which offers financial education for securities, banking and insurance professionals, was quoted as saying. “And retirement planning is more of a struggle because life expectancy is longer.”

There is, however, some good news.

“Often neglected in the past, women are receiving more attention from banks and other financial institutions,” the article noted. “Regions Bank, which covers a 16-state area in the South and Midwest from its headquarters in Birmingham, Ala., for example, devotes a portion of its website to women and wealth management, with videos and other information.”

“More and more women control wealth,” said Amanda Weeks, a Regions private banker and wealth manager, “so they have to know their sources of income and how to manage their assets.”

“That includes figuring out when the mortgage will be paid off if it hasn’t been already, whether there is a pension plan or 401(k) for one or both spouses and whether there are other bank accounts or property. Often, one of the most complex issues is determining how to obtain the maximum payment from Social Security, a major income pillar for many older women.”

“When a spouse dies, it is an emotional time,” Weeks said. “It can take some time to find the information and make a plan. And everyone has their own timetable.”