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financial planning for widows

Widowhood: Navigating the Road Ahead

The death of your spouse is an incredibly difficult time. Life feels fogged over. No one really knows what you’re going through. You feel alone and vulnerable. It was easier before. You had things under control. Now time feels frozen, but also like you’re on a runaway train edging towards the abyss. You want to be strong and responsible and you have so much to do. But in the morning it’s hard to get out of bed and face your new world. The pain doesn’t go way, but the days and weeks pass and it stops getting worse.

How our expertise with widows and finances can help

As you transition into your new life, it’s important to ask for help. Support is critical during this difficult time. But married friends often become distant, other friends are simply uncomfortable, and family members often live far away. 

It can be a lonely time when you need to gather composure, ground yourself, and ensure nothing falls through the cracks. 

But you’re not alone. We’re here to help you. We’ve worked with widows for the past two decades can help you feel in control and empowered to deal with your immediate and more distant future. 

We understand the widow’s financial journey, and we help prioritize what you should focus on and when in the context of your natural evolution through this challenging time. Our checklists and tools help prioritize what needs to be done and when, so you can better navigate this life transition, whatever stage you may be in.

The Four Stages of Widowhood

four stages of widowhood

ANTICIPATION STAGE

As financial advisors, we’re often the recipient of unwelcome news. One of the worst is when a client shares a health diagnosis. We find the most important thing we can do is to encourage clients to share their fears and concerns. The conversation always becomes emotional, but through this process, we always find opportunities to help evaluate options and plan for a smooth transition. It’s a crucial moment, but unfortunately also a missed opportunity for many people who don’t have a trusted advisor.

Case Study

Janice and Steve were in shock when they came to us. Steve had glioblastoma, the most aggressive form of brain cancer, which has a short life span following diagnosis. Their doctor told them Steve had less than 24 months to live. We talked about all their options and if there were any trials available to him.

Living in northern New Jersey, they asked us if they could afford to stay in a hotel in Manhattan so that Steve could receive treatment from New York-Presbyterian Hospital, where he could be treated by one of the top neurosurgeons in the country and participate in a national trial. We assured them that based on our last financial plan update, we felt they could.

Noticing their anxiety, we reran their plan with this updated scenario. We included increasing health costs for the months ahead adding hotel and transportation costs during the trial period. We also adjusted the survival period when Janice will be on her own without Steve’s higher income to support her lifestyle. Our initial feeling was correct, but we now had supporting analysis to put their minds at ease.

The analysis illustrated that Janice’s financial future would not be in jeopardy if they pursued the New York option. Even though the eventual outcome remained, Janice and Steve had the freedom and the luxury to decide how and where he would receive treatment, increasing Steve’s chances to prolong his life and maintain the quality of their lives.

Steve passed away in 2012, and Janice is doing wonderfully. Later, she told us that our help was invaluable since our work together helped her cope and manage her stress. The couple could spend quality time together without worrying about what they needed to do next.

GRIEVING STAGE

In the grieving stage, we help you prioritize what needs to be done and what can wait. We help you understand what resources are available to you and help you position assets so they are more accessible for your immediate needs. We encourage no irrevocable decisions during this time since you may not be thinking clearly due to stress and grief.

Often widows feel overwhelmed that everything needs to be done immediately. This is usually not the case. Our widow clients find the brainstorming and roadmap design helpful to maintain clarity on what needs immediate attention. The goal is to help you feel financially secure to process your loss and grieve peacefully.

widowhood grieving stage

Now, Next, Later Roadmap

A Step-by-Step Checklist for New Widows
now next later roadmap

GROWTH STAGE

As you start adjusting to your new life situation and the fog is lifting, we are then able to help her determine if you should sell your house or other important assets by evaluating the pros and cons. We help you understand the valuation of your home and other assets, determining what receives a step-up in basis. 

We help you through the decision of rolling over your spouse’s 401k into your IRA, which is often not apparent, and can be fraught with mistakes. We also help you understand your choices around social security/employer/VA benefits, and whether you should disclaim assets and how those decisions could affect the next generation. We also help you understand changes to your taxes and Medicare premiums and discuss strategies to overcome challenges.

widowhood growth stage

Case Study – Mitigate the impact of a change in tax bracket

Hank passed away last year, and now Margie, as the surviving spouse, is required to file single tax status. Before Hank’s death, Hank and Margie filed using the married filing jointly rate each year. Between their Social Security benefits and Hank’s pension, their AGI was $103,800, and they were in the 12% marginal tax bracket (see table below). Margie is now receiving Hank’s Social Security. Fortunately, Hank had selected 100% joint and survivor for his pension payout, but without the second Social Security check, her AGI has gone down by 33% to $69,800. Her household expenses did not decline 33%, so she is now finding making ends meet more difficult. She was also surprised that her marginal tax bracket has increased to 22% even though her income has decreased. When we are involved, we can help prepare and sometimes even mitigate this surprise.

Widows Often Have Less Income but a Higher Marginal Tax Bracket Before Widowed Once Widowed
Margie's Social Security
$34,000
$34,800
Hanks's Social Security
$34,800
100% JTWROS Pension
$35,000
$35,000
AGI
$103,800
$69,800
Standard Deduction (for over 65)
$28,700
$14,700
Taxable income
$75,100
$55,100
2022 Marginal Bracket
12%
22%
widowhood transformation stage

TRANSFORMATION STAGE

While you might have worked on a comprehensive plan with your spouse as recently as last year, that plan will no longer fit your lifestyle as a widow. Of course, you will continue to miss your partner and have sad moments, but there will come a time when you can start looking forward. As you start coming out of deep grief, it is essential to run through an exercise that helps you explore your values and goals for the future as an individual. We allow you to tailor your plans to match your new life. Our goal is to help you feel financially empowered, in control, and secure.

A Financial Advisor Dedicated to Helping Widows

If you are a recent widow and would like to work with a financial expert who can help you sort out your economic challenges, we’d love to meet you. As your trusted advisors, we’ll listen and support you. Our deliberate and coordinated life transition process will help you embark on your new future with financial autonomy and security. We’ll be there every step of the way to guide you through your immediate responsibilities and into a successful long term financial plan for your many years ahead.

We work locally with clients at our offices in Northern NJ and Sarasota, FL, but can also serve you no matter where you’re based through online video meetings. 

Schedule a Free Consultation

Get Answers For Your Most Pressing Widowhood Questions

You surely have many questions, and we’ll get you the answers you need. These are some of the most common questions we get from our widowed clients.

  • Will I have enough funds to meet my goals now that my overall income has declined?
  • Should I sell my house now that my spouse has passed away?
  • Is there anything I should do now while I can file as married filing jointly or as a qualifying widow that can improve my future tax payments?
  • When should I take Social Security?
  • What should I do with life insurance proceeds?
  • My husband understood the markets and exposed us to risks that I am uncomfortable with. Is there a way to invest with less risk?
  • What pitfalls exist in claiming Medicare?
  • How should I manage my affairs to minimize my taxes?
  • How should my investments be structured or restructured to help generate income more safely?
  • Am I making any big mistakes?
  • What mistakes should I avoid as a new widow?

Our Commitment to You

  • We will listen first, with empathy, to understand your needs and concerns. 
  • We share our in-depth understanding of widowhood and the inherent financial challenges, having worked with widows for over 20 years and published academic and non-academic papers.
  • We will provide objective advice.
  • We will be proactive, contacting you frequently to ensure you are on track.
  • We will help update your plans based on changes to tax laws, the economy, and your goals and objectives.

Unbiased Advice You Can Trust

As fee-only fiduciary advisors, you can lean on us confidently to help you make the best decisions for your financial future. We are obligated by law and oath to put clients first and avoid any conflicts of interest. This is not the case with a financial broker, whose advice can be conflicted by financial incentives to steer you towards particular investment vehicles. 

As your independent fiduciary, our only goal is to help you live your best life and obtain the financial security you deserve. 

If you’re based in Sarasota, FL, or Northern NJ, we’d love to meet with you in our office and see if we’re a good fit. If you’re based elsewhere, as many of our clients are, we’re happy to meet virtually with you to discuss your unique situation and how we can help you.

financial advisor for widows

See our articles about working with widows

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