Alexandra Armstrong, a financial planner in Washington, D.C., isn't a widow herself, but she's long been surrounded by them: Her father died when she was eight years old, leaving her mother a widow, and today, many of her clients are widows. Those experiences helped lead Armstrong to coauthor a book, On Your Own: A Widow's Passage to Emotional and Financial Well-Being, now in its fifth edition.
"It's really important for women to understand the basics of their money so if they do become widowed or divorced, they're not thrown for a loop and have that add to their anxiety," Armstrong says. Today, women across all age groups are more likely to become widows than men are to become widowers, by a factor of about 4 to 1. For those between ages 40 and 44, there are 170,000 widows, compared with 52,000 widowers. For those age 85 and up, there are 2.2 million widows and 564,000 widowers, according to the U.S. Census Bureau.
Here are six strategies Armstrong recommends for women of all ages to prepare themselves:
Know your money. Armstrong says women of all ages come into her office and have a hard time describing how they spend their money. "It's really important that you have a handle on what your income is, what your expenses are, and what your savings are," she says. Many people don't realize just how much they should be saving for retirement, especially considering that healthcare costs will rise as they get older. "Get your financial house in order before tragedy strikes, so you only have to deal with the emotion, not both [emotion and finances]," she says.
Keep a paper trail. Armstrong recommends keeping a file for paperwork related to the estate of the deceased spouse as well as one dedicated to the surviving spouse's accounts. For some of her older clients who have trouble keeping track of all their paperwork, she suggests hiring a personal money manager, who gets paid by the hour to handle bills during a home visit. (A directory of people who provide such services can be found through the American Association of Daily Money Managers. Fees vary by region; in urban areas, they run about $65 per hour.)
Share the accounts. Armstrong says it's important for couples to have at least one joint account, to ensure that either spouse could immediately access the money in the event of the other's death. If an account is in a husband's name only, for example, and then he dies, the wife might not be able to access that money quickly.
Sit on the big decisions. "Don't make any irrevocable decisions in the first year [after a spouse's death]. Don't sell your house, don't give away your car, don't buy annuity, don't move. Just take it easy. Only make those decisions you have to make," says Armstrong. Adult children often want their widowed parents to hurry up and get settled, but she says grieving spouses often aren't thinking clearly during that first year.
Invest conservatively. Armstrong's investing advice, which she describes as "buy good stuff and stay with it," hasn't changed much since prerecession days. For retirees, she still recommends a diverse portfolio with 40 percent of assets in fixed income and 60 percent in equities, including dividend-paying stocks. "We've always been conservative for a widow," she says. Armstrong also recommends turning off financial news channels—she says watching them can cause unnecessary anxiety about the markets.
Get professional help. While not everyone needs to use a financial adviser all the time, Armstrong says professional advice can be particularly useful to people going through a traumatic event. "They might think of things that you haven't thought of, especially if you're in crisis mode," she says. She adds that widows should keep extensive notes and consider bringing someone along to the meeting to help them stay organized, especially during that difficult first year.
Like other aspects of money management, choosing the right financial professional depends heavily on one's personality and lifestyle, but almost everyone can benefit from having as much sorted out in advance as possible, well before widowhood requires it.