How Can Widows Secure Their Financial Future in Uncertain Times?

In this episode of the Wealth Wise Women Podcast, host Wes Cuprill delves into the crucial topic of financial planning for widows, inspired by personal family experiences and the startling statistics surrounding widowhood. 

Building on the "Suddenly Single" series, Wes  introduces "A Widow's Guide to a Secure Retirement," highlighting the unique financial challenges faced by widows and the importance of having a robust plan in place.

Discover why the average age of widowhood is a surprisingly young 59, and explore the implications of this reality. Wes discusses the misconception that Social Security is sufficient for retirement needs and the looming issue of rising tax rates, emphasizing the potential benefits of strategies like Roth conversions to mitigate future tax burdens.

The episode also tackles the myth of self-reliance, encouraging listeners to seek support during difficult times and underscoring the role of financial advisors in providing comprehensive assistance beyond just numbers.

Tune in to understand how to ensure financial security and peace of mind in the face of life's uncertainties.
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Transcript

>> Wes Cuprill: 0:00

I have a very good feeling tax rates are going to increase over the next few years. They have to. Our national debt is spiraling out of control, and we're going to have to come up with new revenue sources to pay off that debt. One way to do it is to start taxing retirements at a higher rates. So there are strategies in place that you can employ now to possibly avoid future tax burdens. Hello there, and welcome to another episode of the Wealthwise Women Podcast. My name is Wesapril, and in today's episode, I want to build upon a conversation that I had a couple weeks ago where I talked about Suddenly Single A Divorced Woman's Guide to a Secure Retirement. This week I want to discuss book two in our Suddenly Single series, and that is A Widow's Guide to a Secure Retirement. Now, I talked a bit about the motivation behind why Money and Clarity decided to start working with women and why we started writing about the books. A lot of it is because of my grandmother, Jeanette. She found herself divorced at a very young age. Had some financial concerns during that time and whatnot. But now my grandmother is also a widow, so she's seen both sides of the issue when it comes to dealing with divorce and then dealing with widowhood. And I think it's a very, very important conversation to have and a very important topic of discussion given the fact that there are a lot of stats that point to why widowhood is such a big deal. I was shocked when I learned the average age of widowhood is only 59 years old. That is incredibly young. On top of that, it's much of the reason why 80% of men will die married, but 80% of women will die single. And because of these stats, we have to ask ourselves, do you have a plan in place that accounts for this uncertainty? Are you prepared in the event that something bad should happen? I'm, by no means a doomsday prepper. I don't believe in preparing for the apocalypse or anything like that, but I do believe in being prepared for likely uncertainties that can happen in life. I mean, it's the reason why we buy home insurance. We don't want our house to burn down. Man, we are lucky we have that insurance if the house does burn down. So do you have a plan in place should your spouse suddenly pass away? Not only a plan in place, but do you have a firm grasp on all of the finances of the household? I'm not trying to make any sexist comments or anything like that, but in our experience, when we've worked with couples, it's typically the husband who has the more of the grasp on the finances of the family and the one more typically involved in many of the investment decisions. Now, what I love is that those trends are actually changing as we're seeing more and more women are controlling the wealth of households and making more and more of the purchasing decisions, which love that. However, it still stands that in many relationships, a lot of times the man understands where all the money is and the wife doesn't. If the husband passes away, it can lead to a lot of uncertainty and stress for the spouse because she often doesn't know what all she has, where all of it is, and what does any of it mean. And so it's our job not only to help someone who's recently lost spouse uncover what all the assets are, it's also our job to help them create a plan to help ensure that their retirement remains secure. Now, on top of that, I want to go over a couple of the other things that we talk about in this book. A lot of it it's similar to the points that we make in the Divorced Woman's Guide to a Secure Retirement. But there's a couple other things that I don't think I fully discussed. One of those is that the idea that Social Security will meet all of your needs. But I think it's especially true for widows because when it comes down to Social Security benefits, while you may get the spousal benefit if your husband passes away, Social Security may not be enough to cover all of your needs in retirement. In fact, a large percentage of people who find themselves relying on Social Security in retirement find themselves much worse off than when they were still working, if not below the poverty line. On top of that, the Social Security system is broken. There's no secret about that. And I wouldn't be surprised if eventually it fails. When it first started, the average life expectancy was 62. Collection age was 65 and weren't expected really to live that long to collect. And on top of that, 42 people were paying into the system for every one person collecting benefits. Now the average life expectancy is 79 80. Collection age is still 65. And now there's only three people paying in for every one person collecting benefits. So as we can see, the system is failing. And the trust fund, the surplus of funds, if you will, is expected to run out sometime in the 2030. Not great. Now, you won't see politicians running on that platform anytime soon. I think it's political suicide, but something is going to have to happen, they are going to have to address the ticking time bomb that is Social Security. So that's definitely one of the myths that we debunk in the book discussing that Social Security, you cannot rely on that as your sole source of income. But another one of the biggest myths that we debunk, especially for those who have found themselves widowed, is taxes. Taxes are what we would call a ticking time bomb that does threaten your retirement. A lot of people who are nearing retirements have most of their money tied up in what we call tax deferred accounts. So company plans like a 401k or for others, an IRA. So they've been putting money in pre tax dollars and all that money has been growing tax deferred. You haven't paid the tax on it. When you withdraw that money, that's when you have to begin paying the taxes. I have a very good feeling tax rates are going to increase over the next few years. They have to. Our national debt is spiraling out of control and we're going to have to come up with new revenue sources to pay off that debt. One way to do it is to start taxing retirements at a higher rate. So there are strategies in place that you can employ now to possibly avoid future tax burdens. One surefire way is to do a Roth conversion now. So what we discuss in the book are various things that you can do to ensure that you aren't hit by massive tax burdens down the road. The last myth that we address amongst the seven that we address in the book is the idea that you won't need any help. I'm not here to contest anybody's self reliance, if you will, when it comes to family. I think going anything alone is an extremely difficult task. Carrying the emotional burden of loss and trying to manage all of the things that come after the loss of a spouse can be overwhelming. I've not experienced it myself, but I've witnessed it and I can see the burden that it has on those who are experiencing it. And the only thing that I would say is I encourage people not to go through things alone. And our job as financial advisor isn't just to help with the numbers. I think I say this in pretty much every episode. It's our job to help you in any way that we can t. So while yes, we help with a financial plan, we help put the investments together properly, we're also there to help our clients in any way that they might need. We especially are helpful when it comes to the psychology of things and helping you get through whatever tumultuous time you might be experiencing, especially the loss of a spouse, we can help you put a plan together that helps ensure that the next years of your life that you are going to be okay again. It's the answer to that question, will I be okay? And our job is to help you answer that with an emphatic yes. So that's just a quick, high level conversation about our second suddenly single book. Both of these books you can get on our website, moneyincclarity.com. just scroll down a little bit on the home paage and you'll find a section to request free copies of the book. All you have to do is input your email and we'll send it to you right away. If you find yourself suddenly single, or if you've found yourself widowed or divorced, or you just have any uncertainty in your life, I would love to sit down and discuss how we might be able to help you. No one should have to go through life alone. Or should they have to deal with life's uncertainties alone? If there's any way that we can help, we'll tell you. And if there's anything that we can do in terms of helping you put together a financial plan that ensures your financial security, we can show you what that looks like. Simply go to visitwithm.com and pick a day in time that works best for you. That being said, I hope you enjoyed this episode and the next week I look forward to, circling back to something that's a current events topic. That being said, take care. Thanks.