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Money Moves for Women Who Become Single in Retirement

6 steps to gain a stable foundation and avoid running out of money


On average, women outlive men by about five years, according to the Centers for Disease Control and Prevention. And the Social Security Administration reports that women who reach age 65 can expect to live, on average, 21 more years. Overlay on that the Association for Financial Counseling and Planning Education’s prediction that seven out of 10 boomer women will outlive their husbands, which means that many of these women will be living as widows for 15 to 20 years.

Nothing is more devastating than the sudden loss of a spouse, but this shock can be exacerbated by a flurry of financial concerns. New York Life’s 2014 Loss of a Spouse Study found that 68 percent of widows reported significant life changes following the loss of their spouse. Not surprisingly, financial concerns were at the top of the list: 55 percent of widows reported challenges adjusting to a change in income level, and 38 percent reported needing to cut discretionary spending.

Mathew Greenwald & Associates’ Survey of Recent Widows conducted on behalf of the Women’s Institute for a Secure Retirement (WISER), found that three in 10 widows did not have an emergency fund. If you’re a woman who finds yourself suddenly single in retirement, you’ll want to try to have an emergency fund equal to at least six months of expenses. That can ease your mind, so you’re free to make short-term decisions unencumbered by financial fears.

Then, to ensure your financial foundation remains stable and you don’t run out of money in retirement, follow these six steps:

1. Allow time to grieve. Your first priority must be dealing with your emotions. Many widows feel a sense of panic, especially if they spent the past months or years in a state of crisis, caring for their ailing spouse.

55 percent of widows reported challenges adjusting to a change in income level and 38 percent needed to cut discretionary spending.

This can’t be repeated enough: It’s wise to postpone making major financial decisions for at least six months to a year.

2. Stay flexible. If you receive a life insurance disbursement, put it in a money market fund rather than a certificate of deposit, which would tie up the cash for a period of time.

3. Develop a plan to deal with bills. If you weren’t your family’s chief financial officer when your husband was alive, you may need a crash course in personal finance. In this case, set up a system to deal with bills and to evaluate your investment account statements. Break down the long list of complex financial issues so they can be addressed in an orderly fashion.

4. Set a realistic budget. Your life has changed and so, too, should your budget. Track every penny you spend for several months. Then, once you finalize your new budget for your new life, stick to it.

It can be helpful to view your budget as a “spending plan.” That is, rather than viewing your budget as a restriction on spending, embrace it as a tool that involves choice and ensures that you spend your dollars mindfully on what matters most to you.

5. Look beyond financial matters. In addition to finding a financial adviser, you may also need to work with an attorney, psychologist or grief counselor. Look for professionals who have necessary skills and empathy for working with widows and women in transition.

6. Put a team on your side. Many recent widows turn to family members and friends for financial advice. But while these people may provide essential emotional support, it is unlikely they can serve as a source of dispassionate expert advice. And if overused, relationships with them can create an unhealthy dependency that prevents you from making your own decisions. No one can take the place of a lost spouse, but you can create a team of experts and delegate to them the responsibility of planning for the future.

One last thing: In this emotionally trying period, it’s still important to set both short- and long-term goals. As all-consuming as the present may be, keeping your eye on the future and brighter days ahead can help with the healing process.

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