By Eileen Ortega, CTFA
A common feeling among the widows I’ve helped over the years is the anxiety that comes soon after losing their spouse. Initially, the feeling is heartbreak, followed by all that comes with losing a loved one. You go through the steps of saying goodbye over the first days and weeks, and for many, it feels like being on autopilot. However, once they move past this, and family and friends begin to step back, the anxiety sets in.
You have spent years, often decades, side by side with your spouse, each with your own “responsibilities” in running your lives, but always with that partner. Now the idea of moving forward on your own feels daunting. Where do you start? How do you know if you are doing it right? You may want to retreat into grief and do nothing. While this might feel “easier,” healing can begin when you accept your new reality and retake control of your life.
“Surrender to what is. Say ‘yes’ to life and see how life suddenly starts working for you rather than against you.” —Eckhart Tolle
The article below speaks directly to this idea. At the risk of sounding insensitive to the vast emotions you are grappling with, I believe that having a to-do list sometimes helps us to get started. The smallest steps can move us forward.
One critical step in moving forward is to get your arms around your changing financial picture. While many things remain the same, inevitably others will be different. By having a clear understanding of all the moving parts, you can significantly reduce the anxiety you feel about tackling the unknown.
Even if you must take corrective steps, it’s better to know they’re needed so you can create a plan for your future.
Helpful steps to organize your finances after your spouse dies include:
- Know where your accounts are (banking, credit, retirement, insurance, etc.).
- Get the latest documentation for all income (Social Security, pension, rentals, etc.).
- Gather all loans and bills.
- Collect all property records (home, car, etc.).
- Gather your tax returns.
- Gather documentation for wills, trusts, powers of attorney, and other estate planning documents.
Have everything in one centralized, secure place, whether online or in a physical location.
This step can be challenging. Lean on people you trust for help. Talk to your financial advisor, CPA, or attorney.
Understand the Big Picture
Losing your spouse changes so many aspects of your life and, most certainly, your financial picture. Whether it is the loss of your spouse’s salary, a drastic increase of your assets from life insurance, or expenses incurred in caring for your spouse, your financial picture has changed. It’s important that you are aware of the change and the short- and long-term impact on your situation.
Once you have an organized financial picture, you can build a budget that fits your new life. You may find it helpful to think of a budget as less of a “restriction” and more of an “awareness” of what it takes to run your life the way you want to live it.
A budget will provide vital structure to help you avoid under- or overspending and gives you a foundation to base your goals on. It can end up providing you comfort and confidence that you are not at risk of running out of money.
The following steps will help with this process:
- To begin, make a list of all expenses involved in running your life today. This list should include everything from utilities and taxes to vacations and hobbies. You don’t want to leave anything out since the goal is to understand your expenses today. Add to these costs a budget for “unforeseen expenses,” such as home repairs and new cars, since it is likely that each year will have something you have not planned for. In addition to regular ongoing expenses, make sure to include one-time or immediate expenses that you will need to take care of.
- Next, you add your income. This list includes all salaries, pensions, investment income, and Social Security benefits. A good place to look for your income sources is a checking account to which income is deposited or your tax return, which will list all income from the prior year.
- An essential part of this step is to remember that some sources of income, such as pensions and salaries, may end with your spouse’s passing. Your advisor can help identify any income changes and work with you to estimate future income accurately. By creating a budget, if your expenses exceed your income, you’ll know immediately and can act. You may need to make only tweaks, like canceling memberships or subscriptions you do not use, or you may need more significant changes, like selling a home and downsizing. Alternatively, you may conclude you have been living below your means and have room to do things you had not done previously. The budget helps you understand this.
Over time, as you complete this process, your anxiety should lessen since you have taken more control over your future. Initially, you will assess your short-term needs and goals. Your next steps will include working closely with your advisor to revise your investment strategy, tailoring it to your newly changed circumstances.
Years ago, a widow shared with me that she and her late husband’s advisor told her simply, “You don’t need to worry—we are just going to stick with your husband’s investment strategy.” Not only was she unfamiliar with the “strategy,” but given the loss of his income after his passing, it was imperative that the plan be revised to support her new circumstances. Unfortunately, it never occurred to the advisor to ask what had changed and, more importantly, what her needs were.
A true test of the advisor best suited for you is that they make sure they are working for you. The questions they ask you will certainly tell you whether this is the case. Having the right advisor helping you organize your finances can give you more confidence that you will be financially OK in your new reality.
If you have questions about moving forward financially, you may want to talk with a financial advisor who works with surviving spouses. Our fiduciary wealth management firm in Ponte Vedra Beach, Florida, offers a complimentary consultation. We invite you to schedule a consultation today.