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3 Reasons Female Military Spouses Should Plan for Widowhood and What They Can Do to Prepare

Retirement Funding Military Pay and Benefits Insurance

It's a fact women live longer than men. Scientists aren’t certain why exactly but some believe it could be because women’s double-X redundant chromosomes, estrogen, or lots of other factors.1 But the bottom line is that the population of widows is far greater than widowers. 

The problem is that too many widows are unexpectedly thrust into a new life, sometimes unprepared to face the financial challenges of going at it alone. The death of a life partner is something no one wants to think about. However, good financial planning and a realistic outlook can give both you and your spouse peace of mind. That planning also has the advantage of shoring up both your retirement incomes if you beat the odds.

More women, including military spouses, need to plan for widowhood as part of their financial and retirement strategy and here are three reasons why:

Reason 1: Women Can Expect to Outlive Men by Almost 5 Years2

A higher life expectancy means a married woman is more likely to become widowed and at a relatively early age. For example, in 2011 the median age of widows was 59, with other statisticians claiming the average age was 55 or 56. So that means at least another 26 years of life expectancy (and living/retirement expenses) for the widow.

Reason 2: The Death of a Spouse Is the Number One Stressor3

Even more so than a divorce, the death of a spouse is one of life’s most devastating events. The stress, bewilderment, and deep sense of loss could lead to paralysis and indecision in facing the new financial challenges of getting on with life.

Reason 3: About 25 Percent of Widows Go Through Their Husbands’ Death Benefits After Only Two Months

The poverty rate among elder widows is as much as four times higher than elderly married women. Their average annual income is less than $20,000 per year.  Many widows end up living on their own and need an independent retirement income.  

So, the new widow must plan head. Unexpected complications like probate, wills and family disputes can heap additional stress and heartache on top of financial problems.

What Can Female Military Spouses Do to Better Prepare for Widowhood?

Organize Your Assets

Don’t wait. Do this now, whatever your age. Gather up those insurance policies, retirement plans, mortgage and list of debts. Write down the account numbers for your bank and broker. Don’t forget your property deeds and titles, powers of attorney, passports, and birth/marriage certificates.  Consider using an on-line estate organization tool such as everplansTM  (C.L. Sheldon clients receive this service as part of their relationship with us).

You'll also want to make sure you understand Veterans Administration (VA) benefits that might be available to you such as Dependency and Indemnity Compensation (get a glimpse of this benefit here).

Don’t store anything in a bank safe deposit box that you may need before final probate. Safe deposit boxes could be sealed by a probate court. Those vital documents could be inaccessible before the estate is settled. This advice goes double for wills.

Run the Numbers, Make a Budget, and Grow Your Nest Egg

Information gathering is the first step to knowing whether you will have enough money to get by on after the death of a spouse. The numbers may tell you that you can’t support your current lifestyle if one of the paychecks stops or your Social Security benefit becomes less. Plan accordingly.

Get a handle on your current expenses vs. income. If you are in your high earning years and are now making more than you can spend, start thinking about putting that extra money to work. Look into additional savings and investment plans that you can convert to an additional pension — annuities, for example. 

Think Long and Hard Before Declining SBP

If the military member will retire, you and only you can decline the Survivors Benefit Program (SBP) when your spouse actually retires.  Come back here in the future to learn more about SBP, but in general SBP will pay you up to 55% of your spouse's retirement pay.  And on top of that, the benefit keeps up with inflation.  That can go a long way towards solving your income problems.

Make Sure Your Estate Documents are in Order

The I Love You Will you completed with your spouse at the base JAG office was o.k. when getting ready for a deployment.  It isn't an estate plan.  Meet with an estate planning attorney to check and potentially update your estate planning documents.  Just like your financial advisor, your estate planning attorney needs to be familiar with military and VA benefits.

Military Spouses Have Unique Needs

Military spouses are America's true heroes.  Your life to date has been different than those who aren't married to military officers.  Make sure your plan includes the unique characteristics of your life or find an advisor who understands and routinely works with military families.

1 http://www.bbc.com/future/story/20151001-why-women-live-longer-than-men

2 www.statista.com/statistics/274513/life-expectancy-in-north-america/

3 http://www.dartmouth.edu/~eap/library/lifechangestresstest.pdf

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