Paperwork, income declines, and sudden responsibility for financial decisions are just some of the challenges
In spite of the near-universal use of “till death do us part” when exchanging “I do’s,” many spouses are still caught unprepared when their partner passes away.
In a newly released study on the financial challenges and complexities of widowhood, Merill Lynch and Age Wave said the US has 20 million widows, with 1.4 million being added annually, according to ThinkAdvisor. Two in three become widowed at or after age 65.
“However, the study found few are financially prepared for the loss of a spouse,” ThinkAdvisor reported. Fifty-three per cent of widows said they and their spouse had no plan in case one of them passed away; among married retirees, 76% said they would not be financially prepared for retirement in the event of their spouse’s death.
One of the top financial challenges identified by widows was becoming the sole financial decision-maker: while only 14% said they were making financial decisions by themselves before becoming widowed, 86% reported having to do so after the event. Loss of income was another issue, with half of widows experiencing a household income decline of at least 50%.
Another major financial challenge is going through the ensuing avalanche of financial and legal paperwork. Of the widows surveyed, 72% said they had to file for social security benefits; 95% obtained a death certificate; 52% applied as beneficiaries for their spouse’s retirement accounts; and 45% had to request permission to access their spouse’s accounts — among other paperwork-related tasks — all within their first two months of widowhood.
The survey also dove into the advice widows would like to offer others. More than half said married couples should know how to get access to their spouse’s accounts (74%) and have both names on all accounts, deeds, and other documents relating to assets and income (65%). Other important suggestions were to:
- Locate important documents;
- Continue to pay bills on time; and
- Notify employers, banks, and other institutions
The survey covered more than 3,300 respondents, which included 2,638 widows and 741 married, never-widowed respondents.