As a widow looking toward retirement, you have a number of financial and emotional concerns you’re currently facing. Whether your spouse recently passed away or not, it can feel daunting to consider going through this next chapter of your life without them by your side.
However, with some forward-thinking and strategic planning, you can make the transition to retirement feeling financially confident in the lifestyle you envision for yourself. Follow these steps to get started.
Making the transition to retirement means rethinking how you spend your daily life. If you’re widowed, this is especially critical for you. To avoid being overwhelmed, start by thinking about the first 3-5 years of retirement. From there, you can explore other lifestyle options as you continue to move through this season.
The First 3-5 Years
There are a few critical questions you need to ask yourself before you first enter retirement:
5 Years and Beyond
As you continue to move through your years as a retiree, you’ll have a few less-than-glamorous lifestyle considerations. Your primary focus should be having a plan for your living arrangements if you’re unable to care for yourself anymore. Although this may be a long way down the road, it’s important to have a plan in place - both for your personal peace of mind and financial strategy. You might consider:
Once you’ve determined the lifestyle you’re interested in pursuing, you’ll be better able to get your arms around your retirement expenses. You’ll want to include:
Lifestyle expenses (like travel, eating out, etc.).
Living expenses (utilities, groceries, etc.).
Medical costs (Medicare and other healthcare premiums, assisted living).
Legacy building (trust contributions, funding grandchildren’s education).
Start by determining your day-to-day expenses, and add in any larger expenses, like medical costs or bucket-list items. You can average out your expenses to a single, annual cost. If you’re planning for longevity, you can multiply your annual calculated retirement expenses by the total number of years you’ll be retired (anywhere between 25-40). Actual expenses will be higher due to inflation, but you’ll get a rough idea.
You’re going to have a variety of income sources as you head into retirement. These might include:
When looking at your total estimated expenses, and the retirement income you’ll have to cover them, is there a gap? If there is, don’t panic. You may still have several years to continue boosting your savings, and you may be able to extend the life of your retirement income by reducing expenses and creating a financial strategy that maximizes your savings by reducing taxes.
Get in touch with us today. When you’re planning for retirement as a widow, it helps to have a professional in your corner to discuss your lifestyle, and help you build a plan that matches your values and needs.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.