Why New Widows Need More Than Just Financial Planning

Till death do us part. 

There are nearly 11 million widowed women in the US, according to the Census Bureau, yet few advisors make this their niche. That’s unfortunate for a few reasons, according to experts at the American College of Financial Services’ Horizons retirement conference held this week in Orlando. For starters, widows often need expert financial guidance and emotional support, but advisors who take a standard approach could risk alienating them. Serving new widows requires a whole different playbook, the panel agreed, and advisors who are not prepared for this transition risk losing client relationships, mishandling communications or overlooking critical financial planning actions.

“The best piece of advice I can give about serving widows, especially very new widows, is to not give in to your normal instinct of trying to jump right in and solve problems,” said Kathleen Rehl, an adjunct professor at the American College. “You have to lead with empathy and let them grieve.” There are some early actions that need attention, of course, like getting a death certificate and filing life insurance claims. “But the majority of the big planning decisions that will affect long-term retirement security don’t need to be rushed.”  

Lessons From Experience 

Rehl, who is now 80 and continues her practice as a financial advisor, was herself widowed 20 years ago. “Even though I was a CFP and a Ph.D. with all the knowledge I needed to manage my finances, I still went crazy when my husband died,” Rehl said. “Now imagine what a widow goes through when they don’t have a lot of financial knowledge.” Sadly, that situation is far too common: 

• 14% of married women over the age of 20 have been widowed, Census Bureau data shows. 
• That rises to 58% of women over the age of 75. 

Naturally, advisors want to solve issues right away and help clients find solutions to their financial problems, said Lindsey Lewis, managing director and chair of the college’s Center for Women. “But remember, grief causes real cognitive difficulties,” she said. “People rush decisions or they forget important things.” The real job of the advisor is to slow things down and reduce the number of pressing decisions very early on. “Don’t look at it as primarily a money thing at first,” Lewis said. ”Take a beat to recognize the grief.” 

Rehl’s other practical advice for the early grieving period: “Don’t hand your crying client a tissue. It sends a signal that you’re uncomfortable and want them to stop. Put a box of tissues on the table before the meeting.” 

When it’s eventually time to do more in-depth planning, some things to consider are that widows often face significant financial challenges, primarily driven by a drop in household income (losing a Social Security benefit or pension) coupled with high, fixed costs like housing. Other key issues include navigating complex tax changes as a single filer, managing debt and taking on sole responsibility for financial planning.

What About Widowers? The planning challenge is markedly different when it comes to widowers. Anecdotally, they tend to get more overwhelmed with day-to-day tasks and household management things, Rehl said. On financial issues, they can be over-confident, even when their financial acumen is low. Widowers also struggle more with social isolation and loneliness, and they tend to remarry more often. That brings in another set of financial and behavioral considerations, including whether to merge finances upon remarriage.