Trying to make ends meet is difficult enough when a spouse dies, but it’s often even more taxing when you are a woman.
The number of Americans 65 years and older has risen in recent years, and with it, the number of impoverished Americans 65 and older has climbed dramatically. There were 56 million Americans 65-and-older in 2019 and 8.9% — more than five million! – were living in poverty, according to the Congressional Research Service. Almost two thirds of that number, were women. If you are widowed, divorced or never married, you are three times more likely to be living in poverty than a married women.
American widows see a 37% decline in household income when their spouse dies, while men see only a 22% drop. Often, the loss of a spouse sends women reeling toward a life of poverty. More than half (51%) of widowed women 65-and-older live on less than $22,000 a year.
Expenses for both older males and females – rent, food, medicine, transportation, etc. – have remained the same, but women just have a lot less money to deal with costs, usually because they seldom remarry.
In 2020, there were 11.27 million widows and only 3.48 million widowers. That means that more than three times as many women as men are trying to make ends meet with only one income.
“When you’re used to having two Social Security checks come in every month and one of them goes away, life can suddenly get very expensive,” said Larry Kotlikoff, author of the New York Times best-selling book “Get What’s Yours – the Secrets of Maxing Out Your Social Security Benefits.”
“The surviving spouse has to deal with electricity, food, cars, maintenance and all the other day-to-day living expenses that don’t change, but they’ve only got one income to throw at it. That’s difficult for anyone.”
Women who reach the age of 65 are expected to live another 21.6 years. That’s up dramatically from 2000 (19 more years), 1980 (18.3 more years) and 1960 (15.8 more years).
According to the New York Times, almost three quarters of men ages 65-74 are married compared to just 58% of women the same age. That means a majority of men are living in households receiving two Social Security checks a month. The majority of women are living in households receiving one.
It should be noted that if your spouse dies, you do NOT continue receiving two Social Security checks. You receive whichever check is higher and the second check goes away.
It is a problem that is widely known and occasionally discussed among politicians, but little has been done to address the matter, even as 10,000 Baby Boomers roll into retirement age every single day.
Finding Financial Help for Widows
There are several government agencies, nonprofit organizations, churches, civic and community groups that offer widows financial assistance, but very few provide it on a continuing basis.
Social Security is the prime continuing resource available for widows. It allows you to claim either your spouse or your own benefits, whichever is greater, but there are a lot of hoops to jump through to maximize your benefits.
The Veterans Administration has a Survivors Pension benefit available to low-income widows who don’t re-marry. The benefit is based on your yearly family income and the number of dependent children. In 2020, a widow without a dependent child, must have an income under $10,000 to get help.
The next-best source of continuing financial help for widows would be the spouse’s former employer. It may take a visit to that company’s Human Resources Department to find out how much is in a 401(k) or other retirement accounts and if there was a life insurance or healthcare benefit left for you.
There also are foundations that provide grants to widows like the Ted Lindeman Outreach Foundation, which focuses primarily on young widows with a family.
Financial Help for Widows from Family
When widows experience financial problems, the most obvious place to turn is family, which can be a blessing, or curse, depending on how it is handled.
A study by Pew Research Center found that 75% of adults say they have a responsibility to offer financial assistance to elderly parents and many have the resources to do so. Some 38.9 million Americans acted as caregivers to an adult in 2020, according to an AARP 2020 report.
The Pew Research Center report showed that 43% of people making more than $100,000 had a living parent 65 years or older. The numbers dropped dramatically as income fell. Only 25% of people making $30,000-$100,000 had parents over 65 and 17% of those making less than $30,000 were in the same situation.
The quickest help from family is a gift of cash. The law allows widows to receive $15,000 from a single child with no tax implications either way. If the child is married, the limit goes up to $30,000. Another way to handle this might be to ask a child for a loan at 0% interest, or a very low, affordable rate.
That could be a quick ticket out of trouble like credit card debt, or past-due housing or utility payments. However, if you are borrowing money from family as a loan, be sure to get the expected terms of repayment in writing. That will help avoid the financial drama that tears apart some families and could cause all sorts of headaches when you die, and your will goes to probate.
Online Financial Assistance for Widows
A visit to benefits.gov might be the best resource for finding government agencies outside of the Social Security and Veterans Administration that offer benefits for widows. You must fill out a questionnaire to see which agencies you qualify for assistance from, but the site is very extensive and useful.
The benefits.gov list includes resources like SNAP (Supplemental Nutrition Assistance Program, formerly known as Food Stamp program); Medicaid for health coverage assistance; LIHEAP (Low Income Home Energy Assistance Program) for help with paying your electric bill; Rural Rental Assistance for help with housing supplements to reduce rent; and Reemployment Assistance Insurance Program that provides unemployment benefits for eligible widows.
Another government website that opened in recent years – aging.gov – offers information on a large assortment of topics, dominated by financial assistance.
Most of the nonprofit organizations, such as churches and community groups, also can be found online. They usually offer help on a one-time basis for things like food, housing, clothing, furniture and other basic needs.
There are some national organizations devoted to widows – The Modern Widows Club, The Liz Logelin Foundation, Widow’s Hope, Acts of Simple Kindness (ASK) – but much of their help is found at local churches and charities.
For example, many Catholic churches have a ministry called the St. Vincent de Paul Society that deals specifically with people in a financial crisis. Like most church organizations, their assistance is on a one-time-only basis for rent, utilities, food, etc., but if you need immediate help, churches and local charities are probably your best bet.
What Happens to Your Home When Your Spouse Dies?
If a widow owned a home with her spouse, paying off the mortgage is her responsibility after his death. For women who did little more than sign the original loan agreement, this can be a shocking experience.
The good news is that if you co-signed the loan with your spouse, federal law prohibits the lender from demanding the entire amount due at his death. Mortgage terms remain the same, as long as you make the monthly payments. The only difference is that you own the entire house and its value, instead of owning just half.
If you are having trouble keeping up with payments, check with your lender to see if your husband had an insurance policy on the mortgage that would pay off the remaining balance.
You might get financial help by way of refinancing the loan. A lower interest rate and monthly payment would provide immediate relief, but that option might also result in a longer payoff period for the loan. Before finding out what happens if you pay your mortgage late, call your lender to find out if they have a hardship program you can enroll in.
One other possibility: A reverse mortgage. You would have to be 62 years of age or older and owe less than half the home’s value to take advantage of this program through a lender. You also could try a reverse mortgage through one of your children or family members, but that could cause unwanted strife in the family if things ever went sour financially.
The final option is to simply sell the home and use the money to find a more affordable living situation.
What Happens to Credit Card Debt When Your Spouse Dies?
There is no simple solution for how to deal with credit card debt after death, but the easiest way to look at it is this: If your name was on the credit card account as a co-signer, you owe whatever debt has accrued there, whether you actively used the card or not. While that might not seem fair, it is the law.
If you were a co-signer (sometimes called a joint account holder) and do not pay on the card, that information will go on your credit report and likely have a major negative impact on your credit score for the next seven years. Your account could be sold to a collection agency, which would pursue it until the statute of limitations (4-5 years in most states) runs out.
If you can’t pay the debt, you would be better off seeking help from a nonprofit credit counseling agency for advice on a debt management plan, a debt consolidation loan or debt settlement to take care of the problem before it reached a collection agency.
On the other hand, if your name is on the account simply as an authorized user, you are not responsible for the debts, but the estate is. If money is available when the estate is settled, it will go toward paying the balance of the credit card debt.
Beyond that? Well, it all depends on the circumstances, including whether you are a resident of the 10 states (Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) that operate under “community property” laws.
In some (not all!) of the community property law states, the surviving spouse is responsible for all the deceased spouse’s debts, even if they had separate accounts. If you live in one of those 10 states, it’s best to consult a lawyer to find out for certain if you’re responsible for the debt.
Does Social Security Save Widows?
Social Security is the primary financial resource available for most widows, but unraveling all the knots tied up in claiming your spouse’s benefits is not an easy task.
That’s why the aforementioned Larry Kotlikoff, an economist with a Ph.D. from Harvard University, became a best-selling author and why he thinks widows should be looking beyond Social Security to ease financial woes.
“Social Security benefits definitely help, but not nearly as much as people would want,” Kotlikoff told InCharge.org. “There are all sort of gaps in the system and ways you have to deal with them to get what you deserve.
“But inevitably, the picture is not all that good for widows. Women receive a disproportionately small share of the benefits. That’s why so many of them end up impoverished as they get older.”
Kotlikoff didn’t want to try and unwind all the “what if” possibilities for widows and social security, beyond suggesting they get an early start in understanding the system because the older you get, the more it becomes a burden than a benefit.
The 2020 Profile of Older Americans study published in May of 2021 said 20% of people at least 65 years old reported incomes of less than $15,000. Another 21% of people 65 or older reported income between $15,000 and $24,999. Kotlikoff also said that the number of widows with income close to the poverty level increases as they age.
“I would suggest that widows make a lifetime budget plan as early as possible,” Kotlikoff said. “Figure out how much you’re going to need to maintain the lifestyle you want to lead and then look at your expected benefits from social security, life insurance, retirement plans, pensions, – anywhere you expect to get money – and see if that’s going to support it.
“People usually underestimate how much they will need and you can get hurt very badly is you screw this up.”
Widows of Veterans
The Veterans Administration has a specific branch called the Office of Survivors Assistance that helps widows of veterans find out about benefits and services they are entitled to. Those benefits include dependency and indemnity compensation; survivors pension; educational assistance program and home loans. The services include educational and vocational counseling; financial counseling; and fiduciary services.
Another agency offering widows of veterans help is the Tragedy Assistance Program for Survivors (TAPS), which offers retreats, expeditions and survivor seminars around the country and world for grieving members of lost military.
Tips for Widows Dealing with Social Security
Everyone knows that the Social Security Administration is supposed to be the financial pillow people can fall on when they reach retirement age, but few people realize what a labyrinth of twists and turns the system is.
Here are a few things you should know before trying to claim your benefits.
- Surprisingly, only six million of the estimated 13.6 million widows in the United States received Social Security benefits in 2020.
- The best way to apply for benefits is by visiting a Social Security office in person. Call ahead for an appointment. You will save hours of frustration.
- To receive full social security benefits, you must be 66 years and two months old. You can start receiving reduced benefits as a widow at age 60. Full retirement benefits are at age 66 years and two months and if you can wait, maximum benefits come at age 70.
- Bring original copies of your spouse’s death certificate, birth certificate, marriage certificate and proof of U.S. citizenship. You must have originals – not photocopies! – to make claims at the Social Security office. A photocopy of a W-2 form or self-employment tax returns are also necessary.
- Familiarize yourself with the various options available to widows. You can take either your husband’s social security benefits or your own, but you can’t take both. In some cases, it may be beneficial to take your own, until your spouse’s benefits have maxed out, which would happen when he would have reached 70.
- If your husband received Social Security payments before he died and checks continue to come to you, DO NOT cash them. The government eventually will reclaim all the money they paid after his death. If you cashed the checks, you are liable for that amount and must pay it back.
Widows Financial Problems Get Worse with Age
Though women are catching up rapidly, the majority of those eligible for Social Security and retirement benefits are underfunded when they reach retirement age. The combination of a lifetime of working for less because of the gender wage gap and taking time away from work to raise children usually means women receive lower Social Security benefits and 401(k) or company pension plan for retirement savings.
According the CNBC, the gap in pay among men and women has finally closed in recent years. However, a pay gap does in fact still exist between the genders. The median income for women over the age of 65 was $51,896, or about 1.7% less than the median income for men ($53,768) of the same age.
“And it only gets worse as women get older,” said Cindy Hounsell, President of the Women’s Institute for a Secure Retirement (WISER). “By the time they get to their 80s, a lot of women are near poverty because they never had the discussion with their husband about, ‘What’s going to happen to me if you’re gone?’^”
Hounsell founded WISER to try and get women to do some planning for a future that is almost a statistical certainty: Women outlive men, and for the most part, end up living alone.
“Odds are that if you’re a woman, you’re going to be going it alone at some point late in life,” Hounsell said. “Unfortunately, a lot of them don’t know where the money is, where it’s supposed to be coming from and how to manage money on their own so when their spouse dies, they’re stuck. They don’t know what to do.”
Additional Help for Widows
Financial struggles only compound the stress of dealing with the loss of a spouse. There Is one less person — and, in some cases, one less Income — to pay for mortgage/rent, taxes, weekly expenses and credit card debt.
That might be the time to contact a nonprofit credit counseling agency like InCharge Debt Solutions and have one of their certified counselors offer free advice on dealing with the new financial situation. The counselors can help rework your budget, suggest ways to trim expenses and offer tips to increase income so there is less stress in what already is a stressful situation.
They also can explain how programs like debt management, debt consolidation or debt settlement can help you eliminate debt and stop your financial situation from spiraling out of control. A little help might be all you need.
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