Many of us in this age group will find ourselves suddenly single through life circumstances. Has a divorce or death of a spouse left you suddenly in this position? Statistics show that “gray divorce” is on the increase, and that women are more likely to outlive their husbands. It goes without saying you will go through many changes and have to make many decisions, including financial decisions. Don’t wait until you are in this position to have some type of contingency plan! Whether you’re managing finances on your own already or not, use this advice to help you plan for your future.
It’s worth mentioning that sometimes the change in circumstances is not that you are single, but that you are suddenly managing finances and all of the household decisions because your spouse has mental capacity issues. In this case, you have to make all the decisions while caring for your partner. One woman going through this found it scary to make new decisions about medical insurance, and retirement income. Her words of advice to all women, “Don’t wait until it happens, plan ahead just in case.”
Even if you have been an equal partner in managing finances for many years, being suddenly single can be unsettling. It can make you feel like you don’t know what to do. You may even have been the primary decision-maker about financial matters but it can still be scary to suddenly have to make all the decisions without any input of your lifelong partner. According to a Merrill Lynch study in 2017, women are confident about budgeting and paying the bills, but not so much about managing investments. If this describes you, don’t despair, you can do it!
It’s common advice to hold off on any major decisions if you can. This is so that you aren’t making decisions based too much on emotions vs. thinking through all facts, alternatives and consequences. For example, widows are advised to stay in the family home for a year or so to get their bearings and sort through everything, both tangible as well as sorting through their emotions. The same can hold true for someone going through a divorce. And while women commonly want to receive the home in a divorce settlement, it’s not always financially feasible in either situation.
Recently a client told me that she has been rethinking the decision she and her late husband made to downsize their house for her benefit. Her husband was terminally ill, they owned a large home, and they downsized so that she would have a more manageable home. He died soon thereafter, and now she wonders if that was the wisest choice. All her children live elsewhere, and nothing ties her to the area. Suddenly caring for the house seems burdensome, because she no longer has a partner to share the load.
If your spouse is terminally ill, try to make time to talk about your existing plans. Especially if he has been the one handling your investment portfolio. Try to learn as much as you can about it and how he has made decisions. This will be difficult. One client told me she didn’t do this, because they were too busy managing his illness and enjoying every day that they had remaining together. They both knew it was important, but they put it off.
The one thing you simply cannot put off is updating your legal documents. Your Powers of Attorney, Last Will & Testament, re-titling the ownership of assets, and beneficiary designations cannot wait. This can be especially important if there are children from a previous marriage who may be entitled to a share of any estate left by the spouse who passes. It’s best to consult with an attorney to understand how the laws impact your situation.
You might be re-thinking a planned retirement age or a second home purchase. You may even want to return for additional education to pursue a lifelong dream you had put on hold in the interest of a shared life. Think about your own goals and dreams, and what might be different now that you are single.
Now is the time to educate yourself about all things financial, so you can move forward confidently. You may already have a financial advisor that worked with you as a couple. If you trust that person and have a good relationship, then it probably makes sense to continue that relationship. If you had one or you never felt comfortable, take your time making any decision about whose advice you trust and will listen to. Ask friends who they work with, and why they like them. A good financial advisor will take the time to listen to you and to share knowledge with you so you can be confident about your decisions. They won’t pressure you into making decisions. Lean on your advisor(s) at this vulnerable time.
If you had delegated managing finances to your partner, and he was a “do-it-yourself” type, that doesn’t mean you have to manage your finances the same way! This might not be your style, and you might not be comfortable doing it. Especially if you are widowed, don’t feel that you have to continue doing things the way he did to honor his memory. Recent research shows enlisting the help of a good financial advisor can add up to 4% to your total investment return over doing it on your own!
To summarize, all of these steps point to the need to have a financial plan! All the research indicates those who have a financial plan fare better than those who fail to plan. So if you have one, great, but if you don’t, now is the time to set aside your fears and make a plan!
Rosemary Wright, CFP® is a Senior Financial Planner and Co-Director of Women’s Services for National Wealth Partners, LLC. The information contained in this article is provided for informational purposes only. It is not intended to provide investment, tax, accounting or legal advice. Be sure to first consult with a qualified Investment Advisor Representative or tax professional before implementing any investment strategy.