Planning for the Loss of a Spouse

Losing a spouse is one of life’s most painful experiences—emotionally and financially. While it’s easy to assume that expenses will drop when one partner passes away, the reality is often quite different. In many cases, the surviving spouse ends up spending just as much—or even more.

Just like in retirement, you find you have more time to spend money, the same is true when we lose a spouse. We tend to spend more money because we have more spare time.   We fill this time up with shopping and spending more.   Especially in the day of the internet where we can spend hours shopping on line.

Also, after such a loss, it’s common for the surviving partner to seek connection—whether that means traveling to visit family, dining out with friends, or engaging in more social activities. These costs can add up quickly and easily cancel out any savings from a smaller household.

The Income Drop No One Talks About

The emotional strain of losing a partner is hard enough. But for many, the financial fallout can be equally overwhelming.

When one spouse dies, the household may lose:

• A portion of pension benefits (often 50%)
• One Social Security benefit (the lower of the two)

If you die first, your spouse will collect the higher of the social security of the higher.  You will lose the lower payment.  This can be a substantial loss.   If you collect pension this can be affected as well. It all depends on how you set up your pension collection.  In many cases you can lose 50%.   These two factors alone can cause a serious drop in income.

While both men and women are affected by this financial shift, widowed women often face a steeper uphill battle.

Smart Planning = Peace of Mind

The good news? You can take proactive steps to protect your spouse’s financial well-being—starting today. If you’re evaluating retirement income options, be especially cautious with products like annuities. For example, if an annuity only provides a 50% survivor benefit, ask yourself: Can my spouse maintain their standard of living on just half the income? Before locking into any financial product, consider:

• Total household assets
• Other income streams (e.g., investments, Social Security, life insurance)
• Your spouse’s long-term needs and lifestyle

Final Thoughts

Planning for the unthinkable isn’t easy—but it’s essential. A well-structured financial plan isn’t just about growing your wealth while you’re alive. It’s also about ensuring your loved ones are taken care of when you’re gone.

Start the conversation. Revisit your plans. And make sure your spouse won’t face both heartbreak and financial hardship alone.

Stay Diversified, Stay the Course!