The Financial and Psychological Impact of Widowhood

There are more than 11 million widows and three million widowers in the US. Each year, about 700,000 women become widows.

The adverse psychological and financial ramifications of widowhood are profound, starting with the nomenclature of “widow” to describe women whose spouse has died.

According to Regina Kenen, a “widowed sociologist,” the term “widow” is a “hated description conjuring up a ‘little old lady.’”

Unfortunately, being categorized as a “widow” is a relatively minor issue compared to other ramifications of widowhood.

Sobering facts

Many myths about widowhood exist, starting with the average age of those in this category.

The average age of widowhood in the U.S. is only 59.

Almost 2,800 married women in the U.S. are widowed every day.

A staggering 70% of married women will be widowed during their lives.

Health and psychological risks

Here’s a profoundly alarming statistic:  Becoming widowed is associated with a 48% increase in the risk of death.

Those whose spouses have recently died have a 66% increased chance of dying within three months of the death of their spouse.

Grieving over a spouse's death is rightfully considered “one of the most common, yet distressing, transitions faced by older persons.”

It’s not uncommon for the grieving spouse to experience significant depression, fatigue, heart-related issues, sleep disturbances,  suppression of their immune system, joint pain, loss of appetite, and a general decline in overall health.

Some of the adverse impacts of widowhood are more subtle but still impactful.  Almost 91% of widows experienced brain fog, with 44% reporting it lasted two years or more.

Almost 33% of widows were diagnosed with a new physical or mental health issue within a year of the death of their spouse.

Abnormal stress

The devasting impact of widowhood on the surviving spouse's health is likely attributable to the abnormal stress it triggers.

They are dealing with the loss of a loved one and must confront the “ shattering of one’s behavioral, social, and economic environments that were once shared by the married couple.”

Combining these two stressors creates the perfect storm for health issues to thrive in an environment where immune systems are badly compromised.

Financial anxiety

While grieving for their spouse, they are often under pressure to deal with many pressing financial issues.

In the short term, they must pay medical bills, cover funeral expenses and communicate with insurance companies.

Their new reality may include taking on the unfamiliar role as household financial manager and being in charge of their investments (which may involve liaising with their investment advisor).

These responsibilities will be enormously complicated if the surviving spouse was not previously involved in these activities or if appropriate estate planning wasn’t set up.

According to one survey, 61% of widows whose husbands were responsible for financial planning had difficulty filing their tax returns.

The same survey found that many widows had difficulty locating important papers and obtaining access to accounts after the death of their spouse.

Financial issues

Poverty is generally a massive issue among all segments of the U.S. population. The official poverty rate in 2020 was 11.4%, which means 37.2 million Americans were living in poverty.

Historically the poverty rates of widows have been much higher, approaching 20% for those aged 51-64 and 20.3% for those 80 or older.

Reasons for concern

In two-paycheck families, the loss of one income can be devastating, especially when combined with the loss of a second Social Security check.

Pension benefits may also be reduced, and their tax situation may change.

One survey found that half of the widows surveyed lost at least 50% of their income upon the death of their husband, resulting in more than 25% of them having to move to less expensive housing (which added to their psychological distress).

Coping

Consulting with a financial advisor before making a significant financial decision is a critical first step in coping with the anxiety of being recently widowed.

A financial advisor can revise or prepare a financial plan that considers current and projected income and addresses whether a different housing arrangement is necessary or a more conservative (or aggressive) asset allocation should be made to the investment portfolio.  Other issues include recommending a tax-efficient withdrawal rate and whether a previously non-working spouse needs to seek employment.

Your financial advisor will coordinate with other members of your professional circle, like your accountant and trusts and estates lawyer.

At Daner Wealth, we have guided many widows and widowers through this challenging time with compassion, empathy, and expertise.

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