Financial Tips For Widows

It's hard enough to plan family finances in normal circumstances, but what happens when you're a woman suddenly left alone by the death of a spouse. How do you plan your financial future?

Certified retirement planning counselor and registered investment advisor David Latko offers some answers in his book "Financial Strategies For Today's Widow."

On average, most women will outlive their husbands by as much as a decade and usually more. According to Latko, many of these women "usually relied entirely on their partner for making financial decisions."

Becoming a widow is not only for the old, as the events of Sept. 11 demonstrated, he notes.

Latko's advice for widows of any age is to take some time to assess her situation. Latko offers four points a woman should check:

Stop, Breathe, Define Your Needs And Goals - He says, "Take the first 90 days and do nothing. They won't turn your lights off; you won't lose your house. And don't listen to anyone. Then determine how much money you need to live on. Do you need to sell your house? Do you need to buy a car? Plan for your kids' future?"

Love Your Kids, But Keep Your Life - "Kids think they know a lot about everything. It's always better to go to an expert financial advisor and encourage the kids to go with you and ask questions. Usually, I say, 'Love your children but don't turn your life over to them.' This is for the older widow, obviously. If your kids are financially responsible, they have their own finances to manage. They may be too aggressive or too conservative with mom's money?"

The book also outlines some key questions for the advisor like:

• How long have you been a series 7 broker?
  
• Have you ever had any complaints filed against you?
  
• How do you earn money - by commission or by fees?

Prepare Yourself Intellectually And Emotionally To Learn - "A simple bill-paying process through the Internet is a challenge. If a parent is reluctant to trust someone outside the family, it is up to the family member to help the parent FIND a financial advisor. It may take time for a widow to develop trust, so be prepared to take some time. It has to go slow."

Introduction:

Not too long ago, a very nice lady named Marianne and I had a cup of coffee in my office. Marianne is one of my favorite success stories and has been one of my clients long enough to feel comfortable talking about herself.

"The worst part was just before Peter died," Marianne said, matter-of-factly. "We both knew his illness was terminal, and I tried to keep up a brave front for his sake. During the day, I usually did all right -- but at night, I would lie awake, staring at the ceiling. I would listen to his breathing, feeling that I should be thinking about him. But all the while I was wondering what would become of me. I was terrified."

And she is not alone.

The actuarial tables do not lie: On average, most women will outlive their husbands by as much as a decade and usually more. In fact, in the year 2000 the average age of a widow in the United States was slightly more than fifty-five years.

With an average life expectancy of more than seventy-five, that translates into a lot of years where a widowed woman must deal with the issues of her own well-being without her primary life partner's advice or guidance.

And, as the horrific events of September 11, 2001 so tragically illustrated, the potential for widowhood is not limited by age. While much of this book is aimed at the needs of the older widow, this book also deals with the unique needs of the younger widow. Today, it is not unusual for a woman in the prime of her life to find herself -- and very possibly her young children -- the survivors of what she had planned as a lifelong relationship.

Nor is it unusual for a widow of any age to find herself suddenly faced with a staggering number of questions and decisions to make about her financial situation.

Ask yourself: If this happened to you, would you be prepared?

Most of my women clients are like Marianne; they are intelligent, capable, and competent people. And most of them are also widows who spent the larger part of their adult life with their financial affairs managed by their husbands. It was a system that worked -- until the "managing" partner suddenly was no longer there.

Here's a quick five-question quiz involving just a few of the areas we cover in this book. Do you:

• Know exactly what your assets are, where they are, and how to access them?

• Understand how to establish your own credit, in your own name, and know why this is important?

• Understand how to structure your finances to keep from losing a large part of your money each year to such expenses as excess taxes, hidden bank fees, commissions, inflation, or confidence artists who prey on the unwary?

• Know how to sell your home for the best price, buy a car without being bilked, obtain insurance -- both long-term care and other -- that provides the right coverage at the lowest possible cost to you?

• Know how to develop a financial plan that will allow you to live comfortably, without the worry that your money will run out before you die?

If you answered all of these questions in the affirmative, great! You probably don't need this book.

But in all likelihood, you probably do.

Let me tell you about another of my clients. I'll call her Connie. She's a great lady -- intelligent, attractive, and a lively conversationalist who loves to show me photos of her four grandchildren. She visits us in the office regularly, usually with something she's baked especially for us, and she always brightens up the room.

These days, Connie is living a good life, and she knows it. She also knows it could so easily have been different. For Connie, one of the worst days of her life was also the day that she now recalls most fondly.

"My Roger had died suddenly, in an auto accident," she remembers. "I was in such a state of shock. And then, at the funeral this person came up and just knelt by my chair. He took my hand and said, 'Connie, don't fear for anything. You are well taken care of.' It was what I needed to know at that moment -- I couldn't stop thinking about what would become of me and begin the process of mourning. Those words helped me begin to put Roger to rest."

I happened to hear Connie telling that story a few months ago, and it left me feeling proud -- and more than a little bit sad, too.

Proud, because I was the person who knelt beside her on that terrible afternoon almost a decade earlier; proud too, because I had the ability to tell this good woman something that helped her get through her pain and sorrow.

But the sadness I felt came from the knowledge that there are thousands of women out there just like Connie, women who, through no fault of their own, suddenly find themselves without their life partner, their mate, their best friend -- and, more often than not, their financial mainstay, chief decision maker, and manager of their life security. And when that happens, even if they are surrounded by loving family and friends, they truly know the meaning of being on their own.

I overheard Connie's story late one afternoon and couldn't get it out of my mind. That night, I sat down to start this book. I hope it helps you.

Most widows are like Marianne and Connie, suddenly cast adrift in a chaotic and frightening world where peace of mind has become only a distant memory.

And if that describes you, then this book was definitely written with your situation in mind.

I have spent more than twenty years as a financial advisor and counselor. Over that period, I've managed millions of dollars in pension funds for small businesses, and tens of millions of dollars in investment portfolios for individuals of both great and modest means. I've weathered periods of staggering economic growth and periods of terrible economic downturn, each with their own sets of pitfalls and opportunities.

Most important, though, is the fact that I have helped hundreds of people -- widows and others -- build for themselves the financial security that lets them sleep at night.

It's not magic; it's not even rocket science. It is a logical, easy-to-follow program that helps bring you up to speed on what you need to know, what you need to do, and what you need to avoid. It's a road map to your financial independence and security -- a plan that is designed to work for you for the rest of your life.

It works for Marianne, and -- if you follow the plan -- it will work for you.

Are you ready? Then let's begin.

Copyright © 2003 by David W. Latko