In this week’s case study, the “Money Talks” hosts take a look at a couple in their early- to mid-60s, where the husband recently passed away at the age of 66. She is 61 and wants to stay on track with her plans to retire in five years. In their relationship, the husband handled all the financial responsibility for the household, so the widow is unsure of what to do next.
At Henssler Financial, we strongly encourage all parties be involved in the household financial decisions. We often see couples where one spouse is completely incapable of making fundamental financial decisions. You don’t have to be 66 and suddenly succumb to a heart attack. You could just as easily be a healthy 30-year-old who is involved in a deadly car accident on the way home from work. Regardless of your age or health, we believe it is very important that both spouses know where their money is, how it is invested and how to access it, should something happen to either spouse.
Liquidity can be a concern for surviving spouses, as there can be a significant cost associated with funeral and burial expenses. We often see whole-life insurance policies in place for this reason. However, this liquidity can also be achieved by having liquid assets in an emergency fund that can be easily accessed. If your assets are in tax-deferred accounts, a financial adviser can assist with reallocating those funds in a tax-efficient manner.
For the widow in this case study, and for most families who abruptly lose someone, checklists can be helpful when dealing with a death, as there are some items that should be handled immediately, while others can be delayed a few weeks. Within the first week, family, friends, doctors, clergy, attorney and employer should be notified. You should also contact your insurance agent or company to begin the process to claim any proceeds as the beneficiary of a policy.
The funeral director can be a good source to assist a surviving spouse with obtaining copies of the death certificate, which are usually required for applying for Social Security survivor benefits, veterans benefits or other assets you may be due as a beneficiary. In most cases, the funeral home will report a person’s death to Social Security if you provide the director with the deceased’s Social Security Number.
In this particular case, the husband was already receiving Social Security benefits; therefore, as his widow, the wife is due a survivor’s benefit one-time payment of $255, provided certain requirements are met. Because her husband was receiving benefits and she’s older than 60, she is also eligible for a percentage of her husband’s basic amount. Furthermore, if she were to remarry after age 60, she will continue to qualify for benefits on her deceased spouse’s Social Security record.
If she receives benefits as a widow, she can also switch to her own retirement benefit as early as age 62, assuming she is eligible for a retirement benefit at a rate that is higher than her rate as a widow. This additional income may keep her on track to retire when she wants to. A financial adviser can guide her through her many options, and help project how long her assets will last.
In the age of digital records, one of the main concerns we encounter is the location of the passwords to the accounts. As a surviving spouse, you may have rights to the money in shared or joint accounts, but you could be unable to access it. While it is easy to forget when in a period of grieving, bills still need to be paid. Some may be set up on an auto-pay feature through the bank, but it is in a surviving spouse’s best interest to search through bank records and past invoices to see what bills are paid when and from what accounts.
The death of a spouse can be an emotionally taxing time. Extreme financial decisions should be avoided if possible. Seeking help from trusted advisers can alleviate some of the stress that stems from the decisions you may have to make. If you need help dealing with the death of a spouse, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166.
Disclosures: This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
