In some cases, there are senior women who know little about how to manage their finances and younger married women with careers are often surprisingly uninformed on the basics of finances such as investing, tracking paperwork, handling debt etc. When their husbands die, these women are often completely in the dark. As a result, they make decisions that are not in their best interest. This trend is particularly distressing, since widows make up 11 % of the adult female population in the U.S and 45% of married women are widowed by age sixty-five.
How do you get everything organized? Many widows do not know where everything
is located when their husbands die. If your husband is alive, take the time to ask questions, and review his record keeping system. Whether you are married or widowed, set aside an area of the house for this material and buy a file cabinet. In one file drawer put everything that relates to the estate … his assets, military facts, his Social Security information, his pension and profit sharing plan. Keep the estate-related files completely separate until all bills and taxes are paid and assets are distributed. As these obligations are settled, move the file from estate drawer to your personal drawer
Is there anything that a widow can do to keep up with such information regularly? Frankly, use a trustworthy investment consultant. The consultant reviews the overall financial situation at least once a year, and probably does it every quarter. A responsible specialist will make sure all records and information are in good order and are promptly made available to a surviving spouse.
Can a widow make wrong spending decisions as well as wrong investment decisions? Yes, especially if a lot of money seems to be coming from all directions from life insurance, the company pension plan, Social Security, stock investments, etc. There are serious consequences for taking the wrong action. Make sure you gather all the information and have discussed it with someone you trust.
How do you wind up an estate? You don’t have to retain the same lawyer who drew up the Trust or Will, unless the will makes that lawyer the executor of the estate. You can ask for help from another lawyer. Some widows even do it themselves-going down to probate court and find out what they need to file and how to do it. But if you do it yourself, you have to be careful to follow all steps correctly.
For a consultation on your estate or financial situation, call Lifeguard Financial today at {440) 942-1936 and receive a free organization kit.
RESETTING FINANCIAL GOALS
I. Assess Your Current Financial Situation And Objectives
❖ How aggressive or conservative do you now want to be?
❖ How much time until money is needed for income or purchase?
❖ Consider your age.
❖ Do you need tax favored investments?
❖ Understand or research how different investment vehicles work, their risk level and cost. (Stocks, Bonds, Mutual Funds, Annuities, REITS, etc.)
II. Develop A Strategy In Order To Reach Your Goals
❖ Diversify, don’t duplicate.
❖ Monitor your progress regularly – at least monthly and keep a log.
❖ Create or adjust a savings or investment plan. (Save more, spend less)
❖ Plan for the unexpected. Reduction in S.S., loss of spousal income, loss of employment, critical illness)
❖ Revise your budget every December for the approaching year.
❖ Clear up debt – pay off highest interest rates first, pay mortgage bi-monthly, use charge card only if you can pay the bill in full when it comes.
❖ Maximize work Retirement plans and save more on your own – 10% to 15% of gross pay every paycheck without exception. If your gross income is too high, (Phase-out of Roth Contribution eligibility is $169,000-$179,000 for Joint and $107,000-$122,000 for Single) you cannot contribute to a ROTH IRA, but a traditional IRA is available. And be sure to adjust your 401(k) investments to current market conditions. Letting it ride until Retirement could have consequences, especially as you get closer to retiring.
❖ Set realistic expectations in these current financial and economic times. Cut losses sooner.
Ill. Select Or Changing Advisors
❖ You don’t have to do it alone, seek out a reputable advisor who listens versus dictates, who can create a simpler plan, is 100% transparent on fees, and can assist you with your financial, estate and tax concerns (either within his firm or with affiliates.) Before you commit, ask to see his/her plan for you in writing.
❖ Get a second opinion when you are unhappy with (lack of) service or results. Don’t stay “frozen.” With change comes improvement.
❖ If you are an “orphaned” investor, (have not heard from an agent or advisor) maybe your investments are not in line with your risk level/goals or your annuities are past maturity. Find an advisor for guidance.
IV. In Conclusion
❖ Both spouses should be involved in the investment plan. When one passes away, the transition is seamless and the widow/widower is less likely to be taken advantage of by an unethical Broker, Banker, Advisor, or insurance agent. Sit in on meetings – take notes.
❖ Be sure an executor (child’?) knows where to find car and home titles, policies, statements, social security numbers, military records, etc. Dollar amounts
aren’t necessary if you want to keep it undisclosed. Location of documents is important.
❖ Don’t underestimate the importance of a life insurance review for the benefit of your spouse, children or grandchildren. You’ll pass more money tax free to them than you will through investments.
❖ Get organized –
• Clip/file articles of interest
• Read Kiplinger, Google topics
• Setup a notebook with dividers for statements
• Write down on your calendar consistent dates to check your investments (Last Friday of every week or month, 1st Monday of every week or month.)
❖ Strive for modest progress and stay pro-active (instead of passive) in monitoring your plan and make or insist changes when you feel it’s needed.
❖ Identify and change your BAD HABITS, replace with good habits.
❖ Establish a plan that will pass the most money to your heirs and minimize or eliminate unnecessary taxation. Read, Read, Read. Visit our website at
www.lifeguardfinancial.com for a list of valuable financial resources, books and websites. You need more than Suze Orman & Cramer (They’re infomercials selling books, CD’s, etc.) Bypass them to get objective advice.
❖ Lottery tickets are not the answer. Money management is a lifetime responsibility. It is a Journey; there are no quick fixes.
❖ The best time for a financial tune up and to get going is … TODAY!
If it seems overwhelming or you need assistance, please call Lifeguard Financial. We will help you create a plan, keep you on track, and educate you along the way.
Best Wishes!