How to Stay Afloat Financially After Losing a Spouse

While no one can deny the greater role women play in household finances, many still have fear losing their spouse would create significant financial instability in their life.

"Women in general do not investment as much as men, which is often why they are left in financial disparity after they are widowed or divorced," said Maggie Johndrow, a financial advisor with Farmington River Financial Group in Connecticut. "Women on average have 50% less in their retirement accounts than men do."

Less investment likely is at least part of why nearly 65% of divorced respondents said their divorce created a "financial crisis" for them, according to a new study from Allianz Life. The numbers also revealed nearly 60% said losing their spouse/significant other due to divorce was a real "wake-up call" for them from a financial standpoint.

Johndrow said a reason for the uncertainly likely is women often are not as confident as men when it comes to investing.

"Finance terminology is colored with traditionally male language, specifically including a lot of sports references," she said. "Also, only 16% of financial advisors in the U.S. are women. The lack of female advisors, may deter some women from hiring an advisor, as it is human nature to like to work with someone you can relate to."

On top of that, women are more likely to be the family caregivers — which often may mean taking some time off from work — as well as already earning less than men, she said.

"With less earned income, it may be more difficult for women to max out their employee-sponsored retirement accounts and/or IRAs," Johndrow said.

She recommends women take advantage of a non-working spouse IRA contribution if they need to stop working, and remember to think of yourself when putting money away.

"Ensure that while you are working you are putting in as much as you can into your retirement," she said. "You may be tempted to spend that money on your child's education, but your child—even with a small student loan—will thank you for savings for retirement, so that you will not be a financial burden on them as you age and likely during a time they are trying to start their own family."

Rebecca Pavese, a financial planner and portfolio manager with Palisades Hudson Financial Group's Atlanta office, says it's not shocking there can be stress after a spouse is gone, considering many married couples divide necessary tasks, and this means that often one partner takes a much more active role in managing finances than the other.

"While there's nothing inherently wrong with one partner handling money matters for the couple, if that partner leaves or predeceases the other, the arrangement can create problems," Pavese said.

On top of trying to get their feet back under themselves after having their lives turned upside down, women also are often the one often left with children from a marriage — which can be even more daunting financially.

"Many women try to stay in the same residence following divorce in order to avoid uprooting kids that still live at home," said Sean Hughes, founder of Hughes & Dern Financial Group in Illinois. "They often cannot afford the home they live in on a single income."

Hughes said the best thing a woman can do is create a budget following a divorce.

"Some women are able to reduce unnecessary expenses, while others may choose to get a part-time job or a second job to make things work financially," he said.

Pavese adds if you find yourself in the midst of a divorce, you can still take steps to protect yourself financially by doing things such as making sure you have copies of key documents — like tax returns and bank statements — and understanding your assets and any liabilities.

"Don't forget to research and make sure you understand your state's laws about marital property," she said. "Individuals living in a community property state will have different considerations in a divorce from individuals living elsewhere."

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