The world paralyzed on January 26, 2020.
Early in the morning, one of the most successful basketball players of all time, Los Angeles Lakers legend Kobe Bryant, his 13-year old daughter, and seven others died when the helicopter they were in crashed amidst foggy conditions in the hills of Calabasas, California. Kobe was 41 years old.
And now, isn't the world paralyzed again? Uncertainty over the spread of the coronavirus and its possible complications have people on the edge.
Losing a spouse is heart-wrenching enough without the unanticipated leap into the deep end of personal financial management. Therefore, you need to have special considerations in mind as you plan your financial future.
The Majority of People Who Outlive Their Spouses Are Women
Most women understand too well the odds that later life might find them alone financially. Among baby boomers, for example, an estimated 7 out of 10 wives will outlive their spouses. If you're one of these women, how do you prepare?
Research shows that the average U.S. woman lives almost five years longer than the average U.S. man. According to the Women's Institute for a Secure Retirement, half of all widows become so by age 65. Vanessa Bryant became a widow at the age of 37.
Widows are more likely than their male counterparts to lose income after a spouse's death.
If this happens, you will have to navigate the murky waters of probate to validate a will, as well as many other legal and financial issues. In many cases, the husband handles tax and financial issues. Understanding this new and confusing challenges can be overwhelming.
Some women manage family finances better than men and are equipped to handle money confidently. However, some women often acknowledge that they are not fully prepared to meet long-term financial responsibilities.
Acquiring enough financial knowledge to make confident money decisions goes a long way toward easing the transition to widowhood. Here's what you should know if you become widowed.
Plan and Re-Evaluate
Personal finances can still be a jigsaw puzzle that is difficult to fit together. Dealing with the death of a spouse can be overwhelming by itself, but there is usually no need to make urgent money decisions.
Read that again: there is usually no need to make urgent money decisions.
Think Logically About Priorities
Before you put the puzzle together, look at the picture on the box and understand what you must build. What does your financial plan look like?
Re-evaluate what you value, what's important to you, and the purpose of your money. You might change your goals or timelines for what you and your deceased spouse planned. You might also reconsider how and where you want to live.
A written financial plan gives you a basis to correct course if life or your preferences evolve unexpectedly. Your financial plan can evaluate not just what you possess now but also what you need to cover for many more years of financial security.
This reset of your goals and how you want to use your money also helps you think of what-if scenarios. It will help you identify where you enjoy financial flexibility or where your long-term planning has stress points.
Analyze Your Cash Flow
Address changes to your income and budget before you consider more complex investment, insurance and tax issues.
People who are widowed need to understand changes to their Social Security income, survivor pension payments, and if either relate to expenses. First, make sure you understand the month-to-month basics. Then, explore the rules for inheriting investment accounts or insurance proceeds, and how to put these resources to work smartly.
Review Your Investment Strategy
Men often tolerate significantly higher risk than women when managing money in individual retirement or brokerage accounts. Maybe your investment objectives will differ significantly going forward. Review your investments to fit your new plan.
Not just wives but even husbands who feel they have a good handle on finances should document plans or establish relationships with trusted advisors before facing any emotional turmoil. Your Popular One team will support you so that you can have peace of mind when you need it most.
Copyright © 2020 AdviceIQ. All rights reserved.
Distributed by Financial Media Exchange.