The Need To Prepare To Become a Widow Before You Are One

In 2020, there were more than 13.7 million widowed people living in the United States. Out of these 13.7 million people, over 11 million (or 80%) were women. As women tend to live longer than men, this statistic isn’t that surprising but the number of women who are left ill prepared to financially manage their investments without their spouse is significant.

As reported by Forbes;

“Nearly 60% of widows and divorcees said they wish they had been more involved in the financial planning decisions, with 56% of women discovering hidden debt, inadequate savings or overly conservative or aggressive investments that affected their lifestyle and retirement goals.”

Who’s Managing the Investments

Many couples divide the financial chores with men often managing the investments and women being responsible for paying the bills. Why that is I have no idea but it often turns into a big problem when something unfortunately happens to the husband and the surviving spouse is left holding the bag.

Because they have delegated this responsibility to their husband they usually don’t bother keeping up with what is happening and their investment knowledge suffers because they are busy doing other things.

When your spouse dies your world is turned upside down and you become vulnerable

Dealing with everything as you mourn the loss of your spouse can be overwhelming, especially when you suddenly find yourself responsible for managing an investment portfolio you know little about.

If you are not knowledgeable or comfortable handling financial matters on your own, you need to find a trusted advisor that cares about the well-being of you and your family. Best to ask some of your friends who they deal with and trust to find the best match for you.

Watch out for land sharks!

I hate to say this but you need to be on guard for advisors who prey on widows taking advantage of their vulnerable state. Be wary of advisors that try to push you to buy products like insurance and annuities that work for them in terms of generating a big commission, but may be inappropriate for you.

If you are unsure about things ask for time to think things over and then discuss what they are suggesting with other advisors you are interviewing or some other person that is knowledgeable and you can trust.

And it’s not always strangers who are the sharks.

You need to be on guard for family members sticking their hands out asking for money when you are emotionally vulnerable. Having worked in a bank for a long time I’ve heard countless stories of family members taking advantage of vulnerable widowers and it sickens me. That’s why it’s good to have an advisor in your corner protecting you.

For example if one of your relatives ask for help with a down payment for a new home say you have to bounce it off your advisor before doing anything.

Even if you decide to go through with the request your advisor will make sure you have any loan or financial gift documented so there are no misunderstandings later and believe me there are always misunderstandings.

Avoid making hasty decisions soon after your husband’s death

The emotional toll of losing a spouse cannot be overstated and some widows will try to numb the pain by spending life insurance payouts on themselves and giving monetary presents to their kids which could make them vulnerable long term.

It’s best not to make any major decisions regarding investments, selling a home or giving money to the kids until the shock has worn off and things have settled down after six months to a year.

Have someone that you trust and knows you well serve as a sounding board before making any decisions like selling your home and downsizing or moving in with your family in a different part of the country.

I know living in an empty house can be difficult after losing your spouse but rushing to move in with family might not work out and your could end up regretting moving away from your friends and the community you know. Best to test things out and stay with your family for a few weeks to see if you are comfortable and they are comfortable as well.

Take your time with major decisions so you make the right ones and not end up kicking yourself later.

Avoid making this costly mistake

I’ve talked to many widowers at my seminars and more than a few were sitting with most of their savings in cash and I’m not talking about a little money here sometimes it’s $500,000, or more. These women know it’s a mistake sitting on all that cash but looking at that big cash balance on their banking statement serves as a security blanket for them.

Because they are scared about the markets and don’t understand investing all their money ends up sitting in cash being eaten up by inflation when it could be invested in stocks and grow for the next 20 + years. Until they can find a trusted advisor to guide them they will end up leaving a lot of money on the table which is such a waste after working so hard to get it in the first place.

Bottom line

A spouse’s death is one of the most emotionally gut wrenching events in a person’s life. While you are crushed by grief and can’t even think straight you are forced to scramble around trying to figure everything out.

If you don’t understand investing and have no interest in learning, you should consider seeking the help of a trusted certified professional who knows this area inside and out. They will help you figure out the best way of generating a healthy level of retirement income that is sustainable as well as leaving a legacy to your children and grand children. A trusted advisor will help guide you through this difficult period in your life and help keep the sharks away.

As well, it is also best to be prepared before you actually have to.

Sadly, the odds are a women will become widowed before a man so knowing what your financial investment situation is and how you would manage it before it becomes a necessity is definitely the better approach. 

About the author

Mike Drak is the Author of the best-selling book Victory Lap Retirement and Retirement Heaven or Hell - Which Will You Choose. Along with being an Author, Mike is also an award winning blogger, retirement coach and public speaker and has made appearances on BNN, CBC Radio and iHeart radio. He is a thirty-eight year veteran of the financial services industry and lives with his wife Melina in Toronto, Canada. You can contact Mike through LinkedIn