In 1977, the United Nations began celebrating International Women’s Day. However, the effort to create a gender equal world began hundreds of years prior. The need for a world without bias can be especially acute if you are a widow.
The loss of a spouse is a devastating experience that comes with its own set of emotional and financial challenges. For widows, these challenges are especially acute, as they are often left to manage their finances on their own for the first time in their lives. Here are some of the financial challenges that widows may face and some tips on how to navigate them.
- Loss of income
The loss of a spouse often means the loss of a significant portion of household income. This can be especially difficult for many women as on average they have earned less than their husbands during their working lives. Widows may find themselves struggling to pay bills and meet other financial obligations. In some cases, they may need to find new sources of income to make ends meet.
The prevalence of remote work, made more acceptable by the Covid Pandemic, is a relatively new resource. There are many online platforms that offer flexible work arrangements, such as Upwork or Fiverr and many major corporations are offering flexible to completely remote work. Of course, a financial planner will fully guide a widow through all the available government assistance programs, such as Social Security survivor benefits, existing insurance policies and other survivor benefits that can provide some financial support.
- Increased expenses
Widows may also face increased expenses as they adjust to life on their own. For example, they may need to pay for services that their spouse previously provided, such as lawn care or home repairs. They may also need to pay for medical expenses that were previously covered by their spouse’s health insurance.
To manage these expenses, widows should create a budget that takes into account their new financial situation. They may also consider downsizing their home or other assets to free up cash. Additionally, they may want to look into insurance options that can help cover unexpected expenses, such as long-term care insurance or a health savings account. If the widow has school-age children, it is vital to add or review life insurance to provide for children in case something happens to the remaining parent.
- Estate planning
Another financial challenge that widows may face is estate planning. If their spouse did not leave a will or estate plan, the widow may be left to navigate the legal system on her own. This can be a daunting task, especially if the widow is not familiar with the legal system.
To make estate planning easier, widows should consider working with an estate planning attorney. The attorney can help them understand the legal requirements for settling their spouse’s estate and can guide them through the process. Additionally, widows should make sure they have updated their own estate plans to reflect their new financial situation.
- Investment management and Financial Planning
Widows may also find themselves responsible for managing their investments for the first time. This can be a complex task, especially if they are not familiar with investing. They may also be hesitant to take risks with their investments, which could limit their potential returns. Moreover, if one has never had a financial plan completed, this sad and stressful time is actually an ideal opportunity to take stock of all issues revolving money and the future. A financial plan is like a blueprint for your money and entire financial picture and having a licensed, objective professional create a plan is one of the best investments a widow can make.
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