By Jay Shareef and Chris Rhoads
Have you ever thought about what would happen to your finances if you lost your spouse prematurely? Most people avoid this topic, and understandably so. We don’t want to dwell on things that cause us emotional distress, but what we don’t realize is that by avoiding the topic, we could be setting our financial life up for disaster.
All too often, we encounter widows and widowers who had preferred to let their spouses manage the family finances. For multiple decades, you may have been content to let your spouse make retirement contributions, choose investment decisions, and design the estate plan.
If this is you, that’s okay. But now is the time to start navigating these new waters. You can also partner with financial advisors like our team at WealthFlow Financial, who have helped many widows and widowers successfully manage this difficult life transition. Here are some things our widowed clients told us they wish they had known before they faced the loss of their spouse.
1. Know Where to Start
Fully managing your own finances can be an overwhelming new burden, so we understand if you feel like a deer caught in the headlights. You suddenly need an intimate understanding of all your income sources, expenses, assets, liabilities, plans for the future, insurance policies, and estate plan.
To help you make sense of all these items, our team has designed a streamlined, compassionate process to simplify the complex during this transition. We help you get organized so you can feel confident and in control in this area.
2. Find Out What You Own and What You Owe
Once you have a better grasp of your financial picture, your next step is to gain a full understanding of everything you own and everything you owe. This understanding allows you to plan for your future, taking into account the resources you have available and the debts you may be obligated to, such as your remaining mortgage balance or the balance from personal loans.
3. Create a Financial Plan
Once you understand your income and expenses, you can make long-term plans that are designed to protect you and provide financial security. You can make use of calculators and other financial planning tools that will provide you the information you need to answer questions like the following:
- How much do I need to have saved so I don’t run out of money in retirement?
- If I don’t have enough saved now, what can I do to boost my savings?
- What are the tax characteristics of the different assets I own?
- How will I plan for the possibility of long-term care needs?
- What do I want to happen to my remaining wealth after I’m gone?
Pursuing the answers to these questions might feel like a formidable task, but if you don’t deal with them now, you may find yourself in a tricky spot down the road. And it may be harder than ever to ensure your security at that point.
But you don’t have to do this alone. Partnering with a trusted financial planner can help you create plans to answer these questions with more confidence.
4. Access Your Income Properly
It’s no easy task to learn how to access your income, especially if you are now entitled to life insurance benefits or Social Security benefits that once belonged to your spouse. Many widows or widowers also draw income from retirement accounts or other investments that their spouses took care of. It’s important to access this income properly, as it’s very difficult to undo the damage when you withdraw too much or from the wrong sources at the wrong time.
5. Understand Your Health Insurance
Another important part of your financial well-being is your health insurance. Whether your spouse was still working and providing the two of you with employer-sponsored health insurance or you’ve been using Medicare, it’s important to know how to access and pay for your health insurance in case something happens to you. This is a financial item that should be prioritized, as you never know when you’ll need healthcare.
You Aren’t Alone
Our mission is to help bring confidence and clarity to your financial life as we help you successfully handle this transition. We offer support throughout the journey to make sure you’re well taken care of. If you don’t already have an advisor helping you do that, reach out to us at (301) 798-5250 or schedule a phone call now to see how we can help.
About Jay
Jay Shareef is vice president, financial advisor, federal benefits consultant, and co-founder at WealthFlow Financial. As a U.S. Army veteran, Jay is passionate about helping federal employees create a bulletproof plan for retirement and navigate the often confusing and complicated federal benefits landscape. He spends his days educating and providing clients with unbiased insurance benefits and retirement strategies to help his clients create guaranteed income for life. As a problem-solver and trustworthy resource, Jay always puts his clients and their needs first so they can find financial peace of mind. To learn more about Jay, connect with him on LinkedIn.
About Chris
Chris Rhoads is a co-founder and vice president of WealthFlow Financial. As a registered investment advisor and independent financial professional, Chris is committed to helping his clients in retirement and he takes a holistic approach to financial planning that includes insurance and risk management, investments and wealth management, retirement income planning, and estate and tax planning. Chris has been married to his wife, Tia, since 2009 and they live in Frederick, MD, together with their two young daughters. In his free time, Chris enjoys traveling, watching sports, and being active in causes about which he cares passionately. To learn more about Chris, connect with him on LinkedIn.