Today’s “Financially Savvy Female” column was inspired by one of our readers who asked, “Knowing that the life expectancy of women is greater than men, how do wives plan financially for a life without her husband in the later years of her life?” To help this reader out, we spoke with Hilary Fiorella, executive director of the Center for Women in Financial Services at The American College of Financial Services, and she shared her insights about how women can plan for a financially secure life in the event of a partner’s death.
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Develop Relationships With Financial Professionals
If your partner is usually the only one who meets with the various financial professionals who he/she may consult with, start sitting in on these conversations now, and consider bringing more professionals into the mix if it suits your specific situation.
“Depending on the complexity of your situation, [these professionals can include] a financial planner or advisor, a CPA and an attorney,” Fiorella said. “You really should have those relationships, and you should be active in these relationships. When you have your quarterly, bi-annual or annual meeting with your professionals, make sure that both of you in the relationship are there.”
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Having these professional relationships established ahead of time can be very helpful in the event of your partner’s passing.
“That goes a long way to reducing stress,” Fiorella said. “You don’t want to meet somebody across the table when you’re at your worst, when you’ve just experienced the loss of a partner.”
Have a Clear Understanding of Your Total Financial Picture
“Understand all of the elements of your financial [situation] beyond the day-to-day, because that will impact assets and liabilities,” Fiorella said. “[This includes] your investments and your retirement plan, and knowing how to access any of those elements from the retirement plan should the worst happen. You have to look at your retirement plan as well as any insurance that you may have as part of that retirement plan — life insurance or otherwise — holistically. If you lose the income of a partner, you want to make sure that you have a holistic view of what all of your liabilities are and what your assets are.”
Once again, working with a financial professional can help you to understand exactly what your assets and liabilities are, so don’t be afraid to ask questions to ensure you’ll be financially secure no matter what.
“Women are very willing to figure out how much they’re going to need in retirement,” Fiorella said. “It’s an area that women are curious about, and women are very open to education. They will willingly say to a financial advisor or an insurance agent or whoever that professional is, ‘I don’t understand, can you please educate me?’ As long as that financial professional is not condescending, they love getting educated and want to understand why.”
Work With Your Partner To Develop an Estate Plan
“Have a plan or will or estate plan that accounts for the transfer of wealth and assets,” Fiorella said. “Make sure that you have a living will, a power of attorney and a durable power of attorney for any healthcare needs. Know your partner’s accounts and passwords. Have that all down.”
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Have a Plan for Lifetime Income That Isn’t Reliant on Your Partner
“Because women outlive men, we tend to be a little bit more concerned about running out of money in retirement,” Fiorella said. “Luckily, there is a productive solution there in terms of guaranteed lifetime income product — an insurance product that has an income element is one way to mitigate against that risk.”
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column will explore the reasons behind these inequities and provide solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
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Last updated: Oct. 25, 2021
This article originally appeared on GOBankingRates.com: How To Plan For a Financially Secure Life in the Event of a Partner’s Death