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You can prepare financially, mentally for the loss of a spouse

by Amanda Lambert | Contributor
Oct 26, 2020


No one likes to think about losing a spouse or partner. The reality is, it can happen at any time. If you and your spouse’s financial affairs are not stable during this loss, it can be very stressful. It is human nature to put off the planning that is necessary for the support of the well-being of the remaining spouse. Think of it as having an emergency plan just like you would for any other unexpected event.

Financial considerations

Planning is the best protection against surprises and possible financial stress after losing a spouse. This means meeting with a financial Professional and estate planning attorney to evaluate both spouse's financial situation.

Even in this day and age, it is not unusual for women to make less than their spouses. Making less income affects their Social Security benefit later. Women generally outlive men, so their financial security is compromised unless protections are put in place.

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Add to that the fact that women are disproportionately affected by caregiving duties. Many women reduce their working hours or leave the workplace entirely to care for aging parents. Re-entering the workforce can be a challenge. Replacing that lost income might not be possible. Other issues to discuss:

  • Make sure you both have a will, advance directive for end-of-life care preferences and powers of attorney for one another.
  • Believe it or not, many spouses have little knowledge of accounts, passwords or even banking information. Both spouses must have full access and understanding of the entire financial situation.
  • If you have children, consider a trust or, at the very least a financial power of attorney. Appoint a trusted adult child or friend as the power of attorney to make health care decisions should either of you become incapacitated.
  • The remaining spouse needs a financial cushion to last the remainder of their life. Pensions are rare these days, so most people have retirement accounts. Evaluate these accounts in light of the remaining spouse’s need for support. Make adjustments as necessary.
  • Is there a possibility of the remaining spouse continuing to work? If money is tight, this might be a necessity. Many people are continuing to work well into their retirement years.
  • Simple, accessible savings accounts in case of emergencies should be a part of a financial plan.
  • Spending habits may need to be adjusted. Creating a budget will help the remaining spouse plan accordingly.

Care considerations

Everyone gets older, and many people need care as they age. As a surviving spouse, how will you be taken care of? Some care considerations when doing financial planning are the following:

  • If in-home care is needed, how will you pay for it? Most people state they want to age in place, but is this realistic if chronic medical problems or a sudden injury result in disability? At what point should and could you consider senior living? Understanding the costs of assisted living and in-home care will help you make informed choices and budget accordingly.
  • If your plan is to age in place, do you need to consider home modifications before that can happen? Some home accessibility work can be expensive.
  • Does it make sense to consider asset protection strategies in case you need to qualify for Medicaid later? Medicaid is the primary payor source for nursing home care. Working with an attorney who specializes in asset protection will be well worth the money.
  • Planning for a variety of senior living options makes sense. Assisted living is not the only choice. Creative and less expensive ideas are board and care, and home-sharing. Knowing these options will help you budget for continuing care.
  • If you are the surviving spouse left in the home, are there ways to tap into the equity to help support care? Some ideas are a reverse mortgage (but use caution due to unscrupulous lenders), a home equity line of credit or even renting the property to support senior living expenses.
  • If purchased early on, long-term care insurance can provide a cushion of financial support when you need it most. Premiums can be high, so factor this expense into the complete estate plan. Hybrid plans which combine life insurance with a long-term care rider might be worth investigating.
  • Look at government and local resources for help. Eldercare Locator is a great starting point for possible care support.
  • If your spouse was a veteran, you might be entitled to veteran’s benefits as the surviving spouse. If in doubt, apply.
  • Mental health and coping

    The pain of losing a spouse can be intense, stressful and long-lasting. Having a stable financial situation is just part of losing a spouse. Counseling or support groups can be enormously helpful in dealing with grief. Seeking help is nothing to be ashamed of. Depression and anxiety can be a normal response to the loss of a spouse, but getting support will help you cope. Some suggestions:

    • Grief is normal. Online support groups and forums can help you feel less alone.
    • If grief is protracted and turns to depression (called complicated grief), it might be time to seek professional help. Therapists these days are turning to teletherapy, allowing you to stay and home while getting the help you need. Ask for referrals from your physician or close friends.
    • Look to friends and family for support.
    • If your financial situation is complicated and unsettled, consult with an estate planning attorney or financial professional to help you sort things out. The stress of dealing with a loss and settling the estate may be too much to deal with simultaneously.
    • Taking care of yourself mentally and physically should be a priority after the loss of a spouse. Stress management, proper nutrition and adequate sleep are all important aspects of self-care.

    Surviving the loss of a spouse

    Surviving the loss of a spouse takes planning before it happens. As difficult as it may be, taking the time to protect one another will help you both have peace of mind. Our tips will give you a good start toward making this happen.

    Alliance America can help

    Alliance America is an insurance and financial services company. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.

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