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Advisors know that clients can be separated into various groups by assets, income, stage of life and other traits. It’s not about segregation as much as it is about segmentation.
“Segmentation” should not be viewed by advisors or clients as a four-letter word and it’s not putting a client “into a box.” If anything, by recognizing that clients are at various stages in life, the advisor can provide elevated service. On that note, it cannot be ignored that part of life is death. Translation: advisors likely have at least a couple of clients that are widowed.
Interestingly, both the Merriam-Webster dictionary and Oxford Languages define “widow” as a woman that’s lost a spouse and has yet to remarry, but the word is applicable to men, too. To be sure, it’s a label, but not the defining point of anyone – man or woman.
That said, data confirm widowed women contend with some unique financial circumstances, indicating they should lean on their advisors and that means advisors should have tailored strategies at the ready for female clients that recently lost spouses.
Why Widowed Women Should Work with Advisors
A recent survey conducted by Thrivent confirms the need for widowed women to consider working with advisors and for advisors with female clients in that position to be ready to strategize. The study points out that half of widowed women experience financial difficulties after their spouse passes and 41% said not actionable plan was put in place prior to the spouse dying.
“A majority of widowed women (60%) reported the loss of their spouse as unexpected. Yet only 29% of all widowed women created a will with their spouse while they were together, 6% regularly met with a financial advisor and 5% had developed a written financial strategy,” according to Thrivent.
Clearly, that speaks to lack of preparation, but that’s something advisors can help with. The preparation should start when both spouses are alive. There’s considerable value in having a sound estate plan in place and advisors should articulate those advantages to the couple. If nothing else, a legally binding will ensures the deceased party’s assets go where they’re supposed, helping the living spouse and other heirs avoid costly legal and tax obligations.
For widowed women, there are also debt considerations and it’s more about going into debt just to get by after the spouse dies than it is about inherited liabilities. That’s a significant issue advisors need to address as well.
“Debt is one of the top financial challenges facing widowed women. Thirty-nine percent carried over $25,000 in debt immediately following the loss of their spouse, including 10% having over $100,000. Additionally, 71% said losing their spouse made paying off debt moderately or much more difficult, reinforcing how much they may have relied on their spouse for financial support,” adds Thrivent.
Tips for Assisting Widowed Women
As noted above, planning can go a long way toward helping any widow – man or woman – avoid financial distress after their spouse passes and that work needs to start while both spouses are alive.
Starting early on planning is the first step to take. Others include planning with the right team, meaning married women should consider working with advisors. If they’re spouses aren’t doing so, those women should start the conversation. For women whose spouses are working with advisors, those wives should convey that they want to be part of those conversations and the planning process. A change in outlook can also be constructive.
“While people are commonly encouraged not to make major life decisions shortly after losing their spouse, financial changes may be unavoidable,” concludes Thrivent. “Recognizing this impact and making strategic and thoughtful decisions, with the support of a financial advisor, can help the surviving spouse safeguard their finances now and into the future. Embracing a change mindset can be empowering for widowed women as they navigate their next chapter.”
Related: Good News for Advisors: Investors Paying For Advice Are More Confident