Does Being a Widow Impact Financial Planning?

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Financial planning will change after the death of a spouse.

Your spouse has recently passed away.

You are not sure how you made it through the funeral arrangements and the estate settlement.

Somehow you did.

Your heart is shattered, and you feel lost

You know you need to take care of yourself, but you are not sure where to begin.

According to a recent article titled “Financial planning considerations after the loss of a spouse,” starting with your financial planning will make your situation more secure in the future.

Financial planning will change after the death of a spouse.
The death of your spouse will impact your financial planning.

The truth is being single again will impact your money decisions.

What do you need to consider?

Social Security.

If you and your spouse both qualified for Social Security, you were likely receiving income from both benefits.

After the death of your spouse, you will no longer be able to receive both benefit payments.

Instead, you will only be able to claim one of these benefits.

If your spouse had the greater Social Security in your household, then you can receive that greater benefit of your spouse but not your own.

Although you can typically take Social Security beginning at age 62, a widow can receive the survivor benefit starting at age 60.

If you are disabled within seven years of the death of your spouse, you can collect survivor benefits as yearly as age 50.

Unmarried children under age 18, may be eligible for Social Security survivor benefits.

If the children are 19 and still attending elementary or secondary school full time, then they too may qualify.

Although you are eligible as a surviving spouse to receive the larger Social Security sum, financial planning will be required to adjust and budget for the decreased monthly income.

Pension Benefits.

Did your spouse receive a pension?

If yes, you will likely see a decline in monthly income.


Many who are eligible for pensions choose to have few or no survivor benefits.

A single life annuity payment will end at the death of the worker.

A 50 percent survivor option will pay half of the benefit to the surviving spouse.

As part of your financial panning, you will need to find out whether you will receive partial pension payouts or none at all.

Spousal IRA Benefits.

Did your spouse leave you a traditional IRA?

If yes, you will have a couple options for how to handle these funds.

One option is to roll these funds into your own IRA.

What are the benefits?

These allow you to delay Required Minimum Distributions until age 72.

Future RMDs will be calculated based on your age.

If you are over age 59½, this can be a good option.

If you are under age 59½, distributions from the account may have early withdrawal penalties of 10 percent plus tax payments.

The second option is to roll the account into an inherited IRA.

What does this accomplish?

An inherited IRA will provide greater flexibility.

Although RMDs will be taken annually and not deferred until age 72, there will be no 10 percent penalty for making early withdrawals.

You can even withdraw more than the required minimum distribution and avoid a 10 percent withdrawal penalty.

If you are under age 59½ and need the money available for use now, option two would most likely be the better choice for your financial planning.

Estate Plan.

If you created an estate plan together with your spouse, you might need to make changes.

This is especially true if you made your spouse the sole beneficiary of your estate or the sole designated agent within your incapacity planning.

Failing to update your estate plan is poor financial planning.

Work with an experienced estate planning attorney to ensure your plan meets your current circumstances.

Financial Planning Projections.

Making decisions immediately after the death of a spouse can lead to poor money management.

Review the numbers for your assets, income, and expenses.

Once you have done this, you can create a clear and effective plan.

Reference: (Jan. 9, 2021) “Financial planning considerations after the loss of a spouse”

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