The Quiet Financial Crisis Confronting Women—Unprepared Widowhood
- Mar 6
- 3 min read
By James Shiver, DBA, AFC®
For many women, their greatest financial challenge may be something completely unexpected— the quiet financial crisis of unprepared widowhood. In nearly three decades in insurance and financial services, I've had the pleasure of interacting with thousands of clients, many of whom were women. Some were professionals or entrepreneurs balancing careers and family, while others were stay-at-home moms or caregivers for aging parents. But a common theme that emerged was responsibility. The women in our lives often take on a disproportionate amount of responsibility for others, be it their husbands, children, family, friends, or co-workers.
I saw this firsthand as the child of a single mother, juggling multiple jobs and family responsibilities, while still somehow managing to be an amazing mom. In my experience, many women instinctively put others before themselves, even when it comes to long-term financial security. This reminds me of the airline safety speech that we have all heard a thousand times… "You should put on your own oxygen mask first."
Longevity and the Risk of Widowhood
The fact is that longevity often makes this conversation unavoidable. In the United States, on average, women outlive men by about six years, according to the Centers for Disease Control and Prevention (CDC). Additionally, in many instances, widows outlive their husbands by a decade or more. So, it's critical that women take an active role in their retirement planning and consider the potential financial challenges of being a surviving spouse. Not doing so can potentially have a devastating impact on their long-term financial security.
Common Retirement Planning Oversights
In many instances, couples plan their retirement income without considering the possibility that one or the other could pass away. This oversight can have a significant impact on the surviving spouse. For example, claiming Social Security benefits early may not only reduce the recipient's income but also affect the lifetime income of a surviving spouse. Also, when one spouse passes away, their Social Security benefits stop, and other pensions or income may be affected. Adding insult to injury, the surviving spouse is technically no longer “married,” which could affect their income tax filing status and tax liability.
Identifying Retirement Income Gaps
According to the Social Security Administration, approximately ten times as many women file for survivors' benefits as men. So, for many women, these scenarios unfortunately become a reality. Given these challenges, how can women position themselves to reduce these risks in retirement? As with most things in life, education and clarity are important first steps. When planning retirement income, it's important to consider all possible scenarios and review sources of income and other financial resources to identify potential gaps.
Comprehensive Planning and Solutions
In addition to pensions, retirement savings, and Social Security, various insurance and annuity products can often help meet financial needs. As examples, life insurance can provide an immediate tax-free death benefit to replace lost income and cover outstanding financial obligations—essentially a safety net when it’s needed most. And fixed annuities offer principal protection and guaranteed lifetime income. Given the potential pitfalls and options, what should your next steps be? It is important to work with experienced financial professionals who can help create a comprehensive retirement plan that provides financial protection, reliable income, and peace of mind. Essentially, creating financial security through clarity and planning… Again, you should put on your own oxygen mask first—so you can truly focus on what matters most.
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