Savant Wealth Management

Women are four times more likely to outlive their husbands with 35% of marriages ending in widowhood. Of these women, nearly half lost at least 50% of their income after their spouse passed away, according to a survey conducted by the Women’s Institute for a Secure Retirement (WISER).

Although planning for the death of a spouse is unpleasant, the possibility of losing considerable income because your spouse passes away can be just as unpleasant. Proactive planning can help ease some of that strain.

Create a Timeline

After your spouse passes away, it can feel like everything grinds to a stop. After an emotional event, you need to make a list of tasks that can wait until you get back on your feet. Savant advisor Chris Ruedi suggests putting all non-urgent financial decisions on the back burner. Making big decisions can take a huge emotional toll, so stick to the critical items you need to accomplish.

Six months to a year down the line, take stock of how you feel physically and emotionally to get a better idea of which financial decisions you’re ready to make. No matter how you’re feeling, we believe having an objective financial advisor can help when well-meaning family members or friends offer advice about your financial situation.

Social Security Benefits

Justin Smith, a Savant financial advisor based in Arizona, lays out several ways to consider Social Security benefits if your spouse passes away. Because of the many claiming and switching strategies, it’s wise to consult a financial advisor to help you maximize your benefits. Your advisor can also walk you through the implications of your benefits if you are still working.

Other Considerations

Widows may be eligible to receive insurance proceeds from several sources, including their spouse’s workplace policy. Keep in mind that if you invest the payout from a life insurance policy, you may need to pay taxes on the earnings.

You’ll also want to weigh the options before selling any real estate. If you sell your primary residence within two years of your spouse’s passing, you can combine your own and your deceased spouse’s exemption for a total of $500,000, possibly allowing you to avoid paying capital gains taxes on the sale.

Planning for Longevity

Because women are more likely to outlive their spouses, they need to have a contingency plan in place to maintain their standard of living and ease financial stress after their spouse passes away. Familiarizing yourself with the tax implications and eligibility details for certain benefits can help set the stage for a healthy financial lifestyle.

At Savant, our goal is to help individuals leave behind a lasting legacy for their families. Our deep bench of specialists can address the legal and tax regulations that can affect your plans. If you’d like a second opinion on your portfolio or estate plan, we invite you to schedule an introductory call with a member of our team.

About Savant Wealth Management

Savant Wealth Management is a leading independent, nationally recognized, fee-only firm serving clients for over 30 years. As a trusted advisor, Savant Wealth Management offers investment management, financial planning, retirement plan and family office services to financially established individuals and institutions. Savant also offers corporate accounting, tax preparation, payroll and consulting through its affiliate, Savant Tax & Consulting.

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