Women have come a long way in the last 50 years, but the number of widows living in poverty is still surprisingly high.
Where's June Cleaver of Leave It To Beaver now? Statistics say that she's probably living in poverty, because Ward passed away and left her with a household that she can't afford.
A report produced by Boston College's Center for Retirement Research should be raising some eyebrows among husbands and wives everywhere. The research indicates that nearly 30 percent of women aged 65 and older are living at or near the poverty level. What's surprising is that many of these poor women are widows-indicating that there may be a strong connection between widowhood and poverty.
Taking care of business
Gentlemen, it's wise to take this research seriously. The chances are pretty high that your wife will live more than 10 years longer than you do, and she deserves to enjoy a comfortable lifestyle after you're gone. Here are some tips to help you start planning:
- Review Social Security and pension benefits. When the husband passes, the wife's retirement and pension benefits are usually cut drastically. Review how your retirement benefits will change once you're gone, and consider how this will affect her lifestyle. You may simply have to work longer to compensate for the shortfall.
- Team up on financial decision-making. It's normal for one spouse to take charge of the finances, but this can be disastrous down the road. Tackling financial reviews, budgeting, and investment decisions as a team goes a long way towards helping both spouses understand the financial situation. Use money management software to keep the household's financial data in one accessible place. Couples should also stay informed on where the household documents (such as wills) are located.
- Purchase retirement products. If your wife doesn't work, consider establishing a spousal IRA, which allow for annual tax-deductible contributions if you file joint tax returns. Another option is an annuity that will guarantee your wife a stable stream of income during those retirement years. Annuities are complicated financial products, so seek professional advice to help you decide which program is right for you.
- Analyze your long-term healthcare coverage. The costs of long-term care can be devastating. Plan ahead by shopping around for a long-term healthcare policy. Sooner is better, because premiums on these policies are much lower when you're younger.
- Hire a financial planner. These tips will get you started, but a qualified financial planner can better pinpoint the weak spots of your prospective retirement situation. You may need to implement an estate planning strategy, purchase insurance products, pay off debt, change beneficiaries, etc. There's no substitute for retaining a qualified professional who can assess the situation comprehensively.
June Cleaver wasn't cut out for poverty, and neither is your wife. Start planning now, and relax knowing that she will live out her days comfortably.