When you have just lost your spouse, you may be dealing with the loss of your life partner, partner, and best friend. It can be an overwhelming time and it can be difficult to see a light at the end of the tunnel, on a day when you feel better and brighter about your emotional and financial future.
At times like these, it can be comforting to hear from women who have been there and made it to the other side.
Each year, women who lose their spouse are able to start anew, overcome the immediate and uncertain consequences of this moment and begin to live a new life. Here’s a look at how five of Francis Financial’s clients were able to get back on track after losing their partners.
Sandy’s Story: Making Memories in a New Home
Sandy reached out to us when her husband of 42 years, Mike, passed away. During her marriage, Sandy did not worry about her finances. Mike was a successful real estate investor in New York City and the couple enjoyed a comfortable lifestyle. They lived in a row house on the Upper East Side, where they raised their three children, now adults.
When we met with Sandy, she had decided to sell her townhome, as she didn’t want to have to deal with the maintenance it required or be brought up with painful memories of Mike’s illness. She wanted to stay in her neighborhood so she could continue her daily walks in Central Park with friends and enjoy her familiar surroundings.
Francis Financial created a comprehensive financial plan detailing how Sandy could move into a luxury rental apartment on her block, with all the amenities she’ll need as she grows. We also build a custom portfolio that generates so much income and growth that Sandy doesn’t have to dip into principal. He is also happy to be able to leave money to his children and grandchildren, something Mike also wanted. Sandy has a better understanding of her money and she feels more financially secure than ever.
Madeline’s story: feeling sure she’ll be okay
Madeline reached out to us after her husband, Tim, passed away. Madeline was a nurse and Tim was a CFO for an insurance company. They were able to accumulate a good amount of savings because they were always very careful with money. Madeline grew up very poor and was haunted by memories of having their utilities cut off and the uncertainty of where they would live next. Understandably, money is extremely important to Madeline because it gives her a sense of security.
Madeline enjoyed managing the household budget throughout her marriage and it gave her great peace of mind to know the balance of dollars coming in and dollars going out. However, she Madeline left the investment part of her finances to Tim. Tim worked in the financial field and really enjoyed researching stocks and bonds. He sat down with Madeline several times a year to go over all the details, but in truth, investing wasn’t something Madeline was really excited about. Investing felt risky, and in the back of her mind, Madeline was always worried that they might lose everything in the market, and she would find herself in the same place she had been when she was a child. She felt better not to think about it and leave it in Tim’s capable hands.
Madeline was referred to us by her son because she realized that Madeline was extremely worried about money, and this, in addition to losing Tim, was beginning to affect her health. We meet with Madeline and her son and listen to Madeline talk about her fears of losing her money at the market. Francis Financial wrote a comprehensive written analysis of her financial situation detailing her expenses, income and assets up to her 100th birthday. We were able to work backwards to understand how much money she needed to live on for the rest of her life and how much money she would need to earn in the stock market.
Madeline was relieved to learn that she didn’t need to take a lot of risk in her investment portfolio. Because her lifestyle was so frugal, she could confidently live on just her Social Security and her nursing pension. She could tap into her purse for special expenses, like taking her grandkids on a trip to the Grand Canyon, which she had planned to do the following year. It was comforting for Madeline to know that no matter what, she would be financially secure and that she had a team to ensure her financial health for the rest of her life.
Beth’s Story: Finding out she won’t have to work forever
Beth’s plan was to retire early from a job she no longer enjoyed, but that dream was shattered when Keith passed away suddenly. What was even more heartbreaking was that Keith was in the middle of the underwriting process to purchase a large life insurance policy that would have secured Beth’s financial future if he were to die. Despite many reminders from Beth and the life insurance agent, Keith never got through the process and the new life insurance policy was not issued. Although Beth received life insurance proceeds from a small policy at Keith’s workplace, the money was not enough to offset Keith’s income, and now Beth is not only grieving the loss of her husband, but also dealing with the disappointment of having to continue working in a career you don’t enjoy.
Understandably, Beth was distraught when she went to Francis Financial. We immediately made several smart tax moves with the retirement accounts she received from Keith and created a portfolio to generate maximum returns to reduce the number of years Beth must continue to work. She also advised her to sell a rental property that wasn’t profitable, which took Beth just two years away from being able to leave her job and start the retirement she longed for.
Beth’s story is painful in many ways, but she is moving on and beginning to build her new life. She is thinking of moving somewhere warm after retirement to escape the snow and use her vacation time to research the perfect tropical home for her.
Lily’s Story: Keeping Her Family’s Dream Home
Lily never expected to be widowed so young. Her husband, Mike, was only 43 years old when he was killed in a car accident, leaving her alone with her 3-year-old twins. Mike’s death was the worst moment she could come up with. They had just bought her dream country house, built in the 19th century, which required a great deal of repair and maintenance. Mike loved taking on these DIY projects. Even though the house needed so much work, Lily didn’t want to sell it. Mike and Lily searched for years and felt this was the perfect home to raise the girls as it had a great backyard next to a nature preserve, was in a great school district, and was only 4 miles from their parents.
Understandably, Lily had a lot of questions when she came to talk to us. Would she need to return to work and, if so, when? Could she pay for the maintenance of the house on her own? And most importantly, what kind of life could she provide for the girls? Could Lily still afford to save for the kids’ college funds? Could she send them to summer camp when they were a little older?
Lily’s top priority was making sure the girls didn’t have to sacrifice themselves for their father’s death, as it was going to be hard enough growing up without a father. Lily wanted to work with a financial advisor who could show her all the different scenarios she was thinking about and guide her to the ones that would make her and the girls the most financially secure. Lily also knew her life was going to change and wanted to make sure she had a team that could be with her every step of the way and make adjustments to her financial plan and investment portfolio to support her.
We have been working with Lily for the last six years since Mike’s death, and she is very confident in her financial future. She and the girls still live in that beautiful farmhouse, and we earmarked some of the life insurance proceeds to finish the projects and get it to an easily maintained location. Lily went back to work, but not before spending another year at home with the girls after Mike’s death. Her career relaunch coincided nicely with the girls starting full-time school.
Lily is also saving money in the kids’ 529 college savings plan, and we’ve invested it for high returns, to maximize these dollars. Lily is adding money to her employer’s 401(k) retirement plan and receiving a generous match each year of her contributions. Finally, we move some of the life insurance money into an account to be used for special expenses for the girls, like summer camp. Lily knows that Mike would want the girls to be cared for in this way.
The bottom line for those who need help
For many widows, the loss of a spouse means starting from scratch when it comes to understanding household finances. If you weren’t a part of financial conversations and decisions before, diving in now can be difficult. There are a lot of moving parts in your life right now, but it’s important to make time to get to a better, more empowered place with your money.
To get started, assemble your team of trusted professionals who can help get you to a better, safer place, emotionally and financially. Yes, hiring a certified financial planner is a great first step.
“Friends and family members can offer advice based on their own experiences or what they’ve heard from others,” according to trusts and estates attorney Britt Burner, Esq., of Burner Law. “Unsolicited advice, even if well-intentioned, can actually add to your stress and confusion.
“Now is the time to surround yourself with a team you trust to understand your legal and financial positions and educate you on your options as you embark on this new phase of life.”
President and CEO, Francis Financial Inc.
Stacy is a nationally recognized financial expert and President and CEO of Francis Financial Inc., which she founded 15 years ago. She is a Certified Financial Planner® (CFP®) and Certified Divorce Financial Analyst® (CDFA®) providing advice to women going through transitions such as divorce, widowhood, and sudden wealth. She is also the founder of Savvy Ladies™, a nonprofit organization that has provided free personal finance education and resources to more than 15,000 women.