Losing your spouse is tough and can also bring financial challenges. It can be particularly difficult for surviving spouses in retirement, who may be dealing with an uncertain economic environment and increasing healthcare costs. This article will discuss some financial issues that surviving spouses may face after losing their partner. Change in Social Security Benefits Surviving spouses may see a decrease in their Social Security benefits after losing their partner. Instead of receiving two benefits, they will only be allowed their use or a survivor’s benefit. Managing monthly expenses, such as housing, utilities, transportation, and insurance, can be challenging with a reduced income. Therefore, saving money and taking other steps is crucial to ensure that the surviving spouse can pay their bills. It is also essential to have the funeral director inform the Social Security Administration of the spouse’s death so that benefits can continue to be received. Drop in Overall Income/Loss of Income Losing a spouse can also decrease overall income, especially if the deceased spouse is still working. The surviving spouse may need to return to work to support themselves, which can be challenging if they are in poor health or have been out of the workforce for an extended period. For example, if a couple in their late sixties has a husband working as a corporate executive and passes away, the wife may need to find employment to make ends meet. The Pension Factor Retirees with a guaranteed pension may rely on this income during their lifetime. However, once the pension recipient is gone, the pension payout may stop unless the recipient elects to receive a survivor benefit for their spouse after death. Unfortunately, most survivor benefits for a pension are only about half of the full benefit or even less. Therefore, it is vital for surviving spouses to understand their pension options and ensure they receive the appropriate survivor benefits. Bill Payment If the deceased spouse were responsible for paying the monthly bills, the surviving spouse needs to find a system for keeping track of these payments. It could be a multi-stack drawer or an email system if bills are sent electronically. Ensure you have access to the deceased spouse’s email account to stay up to date with any bills delivered this way. To avoid missed payments, it is also essential to have logins and user IDs for accounts only open in the deceased spouse’s name. Any subscriptions only in the deceased spouse’s name can also be canceled. Life Insurance If the deceased spouse had life insurance, you should contact the life insurance company about the death benefit. It is helpful to have the death certificate and the policy or contract number on hand to look up the policy. The deceased spouse’s Social Security number should suffice if this information is unavailable. The insurance company may offer a cash account for the proceeds, which typically earns low interest. However, it may be more beneficial to transfer the money to a personal bank, cash, or money market account that earns higher interest. Avoiding Scams Surviving spouses are particularly vulnerable to scams, especially if the deceased spouse’s assets go through probate. Try to review debts and other obligations while both spouses are alive to protect against fraud. Be on the lookout for unscrupulous individuals or family members who may try to collect “bills” for items that were never purchased or borrowed. Final Thoughts Losing a spouse is difficult both emotionally and financially. It is necessary for survivors to have a support system of friends and family and to work with a financial advisor to create a well-crafted plan for managing the details that arise in the wake of a spouse’s death. Taking action today can make a difference in the future.
Contact Information:
Email: [email protected]
Phone: 7705402211
Bio:
Mack Hales has spent the past 4 decades helping clients prepare for retirement and manage their finances successfully. He also works with strategies that help clients put away much more money for their retirement than they could in an IRA or even a 401k. We involve the client’s CPA and/or their tax attorney to be sure the programs meet the proper tax codes.Mack works with Federal Employees to help them establish the right path before and after retirement. The goal is to help the client retire worry-free with as much tax-free income as possible and no worries about money at risk of market loss during retirement.•Mack has resided in Gainesville, GA since 1983, so this is considered home. Mack is married to his wife of 51 years, has two boys and five grandchildren.
