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Widows Bereft Of Financial Plans - US Study
Robbie Lawther
6 September 2018
More than half of widows said that they and their spouse did not have a plan for what would happen if one of them passed away, according to a new report. The report underscores how, while there is much focus on an expected $30 trillion intergenerational wealth transfer in coming years, an arguably more urgent issue is transfer of assets between spouses and siblings. With women typically living for longer than men, this can mean that older women can hold a significant chunk of family wealth, but if they haven't been closely involved in managing family money prior to a husband's death, they may be more likely to switch advisors and firms.
A new joint report by Merrill Lynch and Age Wave studied the financial challenges and complexities of widowhood. The firms surveyed 3,300 US-based respondents, including 2,638 widows and 741 married, never-widowed respondents.
Following the death of a spouse, half of widows experience a household income decline of 50 per cent or more. Only 14 per cent of widows said that they were making financial decisions by themselves before their spouse died. Now 86 per cent report having to make decisions alone.
Only 36 per cent of widows who made financial plans worried that they would not be able to support themselves immediately after the death of their spouse. The report also found that 76 per cent of married retirees said that they would not be financially prepared for retirement if their spouse died.
Financial burdens
Around six in 10 recent widows report feeling burdened by immediate expenses, including debt , funeral expenses , and mortgage/rent .
Following an onslaught of financial challenges and disruptions, financial security is at the top of their mind. Some 72 per cent of widows said that being able to afford the lifestyle they want is top priority, followed by paying day-to-day expenses .
Advice needed
A majority of married couples wanted to know how to access their spouse’s accounts, and have both names on all accounts and deeds .
Recent widowers want to locate important documents and continue to pay bills on time . People who have been widows long-term want to get all accounts in their name , update beneficiaries/estate plans , and reassess retirement strategy .