This is a guest post written by Kimberly Foss, CFP, CPWA. She is the founder of Empyrion Wealth Management and author of the New York Times bestseller WEALTHY BY DESIGN: A 5-Step Plan For Financial Security (2013).
Often times I observe with my female clients that even just talking about money tends to stir up anxiety in their souls. They feel overwhelmed and frustrated trying to manage their own finances. They project fearfully into the future thinking about retirement and college for their children. And finally they fear they will never have enough money, no matter how much money they actually have to survive, much less, thrive in their golden years.
This was the case for a very close client and personal friend of mine, who shared her painful loss with me as only she could. She told me, “When I began completing the paperwork for the life insurance and changing the beneficiaries on my IRA, it hit me like a tsunami of emotions…he is gone. I burst into tears; grief stopped me cold, like an invisible solid wall and I am numb, unable to speak at times.” She also shared with me her realization that things her husband used to deal with (no matter how simple, like clearing the gutters after the fall season) will now fall on her shoulders.
Being so close to her initial denial, disillusion, and fears about her future has underscored for me the wisdom of combining emotional support with financial solutions for women in transition from the loss of a spouse or divorce:
Talk to your wealth advisor. Women tend to share personal family stories more than men do. This is especially true in situations where pain or loss is experienced. Details you share with your advisor will illuminate a path for how you proceed. What your advisor learns through your stories will provide the foundation for a long-term relationship and help you make better long-term decisions.
Wait on major decisions. The grieving process takes time, and emotions and financial decisions don’t mix. So, wait at least six months to a year before making long-term decisions. Commonly, you may want to sell the house, move closer to the kids or buy another home, but it’s often best to carefully consider these major life changes.
Develop a plan to deal with bills, etc. Widows and divorcees who have not been their families’ chief financial officers may need a crash course in personal finance. You can start by setting up a system to deal with bills and meet with your wealth advisor to understand your investment account statements. Break down the long list of complex financial issues so you can addressed them in a confident, orderly fashion.
Transition from immediate tasks to long-term planning. At the time when couples divorce, most people focus on the immediate financial concerns—monthly income needs, who pays the mortgage and who pays the next tuition bill, among others. When a spouse dies, there is the immediate drill of locating the will and trust documents, collecting benefits, closing credit card accounts, etc. In both cases, it’s tougher to deal with the long-term issues. Typically, in divorce neither party wants to confront issues beyond the immediate financial questions—but the medium- and long-range implications, such as monetary settlements and appropriate investment strategies have much greater lasting impact and deserve attention. The same holds true when you lose a spouse. After the immediate concerns of locating the will and filing for life insurance benefits, it’s time to deal with life planning, including planning for the children’s education, retirement and other goals—and that’s tough when you are alone. However, the relationship you’ve built with your wealth advisor should provide a solid foundation to develop a plan that takes a holistic view of your situation, provides solutions to all your major financial challenges and helps you reach your goals.