The Financial Penalty of Losing Your Spouse

The Financial Penalty of Losing Your Spouse

Losing your spouse is an unimaginably difficult experience to go through. No amount of money can repair the emotional pain it causes, but you may also be subject to an unofficial financial penalty, as well, for the changes in your life. 

The surviving spouse is often left with considerable monetary challenges, unfortunately. These may cause additional stress on top of grief. That’s why this post is about the most pain-free ways to manage your finances, post-loss. 

Please explore the following with us:

  • Pension benefits for widows
  • SSA benefits for surviving spouses
  • Divorced widow benefits
  • How widow benefits are calculated

Pension Benefits for Widows

Unfortunately, for your long-term financial security and that of your loved ones, it may be necessary to look into your spouse’s pension benefits as soon as possible. Taking the time to examine them now can prove extremely beneficial in the long run. Officers of many companies, for example, are granted access to generous retirement packages that can add wealth and comfort to a widow’s lifestyle. 

Survivors’ pension benefits are often customized to meet the unique needs of a widow’s situation. As a result, they can help provide much-needed financial peace of mind during this time of turmoil and transition. Benefits payable can range from monthly payments for supplementing reduced income in the absence of the deceased’s salary to a lump sum payment of money they set aside.

Regardless of the benefits structure, you can at least be provided a degree of relief, once you know what’s involved. Understanding what your spouse was entitled to can also be a comforting way to honor their memory by utilizing the safeguards lovingly set in place to protect you now. 

SSA Benefits for Surviving Spouses

The Social Security Administration (SSA) provides a wide range of benefits to widows. Similarly to pension benefits, you may qualify to receive a one-time lump sum death payment to help ease your financial burden. However, you may also receive ongoing benefits, such as monthly survivor benefits, once you reach retirement age.

The SSA also has various programs and resources available to widows who need support during this challenging time. For instance, if you have a disability, you may be eligible to receive a survivor’s benefit at age 50. Regardless of your age, if you have a child dependent under the age of 16 (or who became disabled under the age of 22), you would also qualify under these circumstances.

Anytime someone has collected Social Security after retirement and passes away, their survivors may qualify for survivor’s benefits. Benefits are often open—not just to widows and widowers but—to minor children, dependent surviving partners, and older children who’re disabled. Grandchildren, adopted children, stepchildren, and step-grandchildren may also qualify. 

Normally, it takes about a decade of work-generated payments into the Social Security fund for survivor benefit credits to start accumulating. The benefit amount is often determined with an eye toward the deceased’s relationship with the survivor, among other things. 

Grieving is never easy, but at least it doesn’t have to accompany weighty financial concerns. Verifying that your SSA rights as a widow have been accounted for can be one less thing to worry about. In addition to helping secure your future financial legacy, it can also be a means of honoring your loved one’s contributions to society. 

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Divorced Widow Benefits

Divorced widows often suffer a double burden, having lost both their spouse and the benefits of marriage. Fortunately, in the United States, a surviving divorced spouse is privy to various death benefits that can offer comfort during the complicated processes of mourning and financial adjustment. 

While these packages vary from state to state, they often include various sums of money, which are calculated according to the length of the marriage. Similarly, any joint assets, which may be augmented by pension funds, are usually factored in. 

If you’re a divorced widow, you may also enjoy freedom from debts accrued jointly during the marriage and alimony and division of assets obtained during your relationship. These breaks can free you up to mourn your loss in peace, free of concern for legal liabilities or debt that might’ve risen after the divorce.

To qualify for benefits as a divorced widow, you need to be all of the following:

  • At least 60 years old, currently
  • Formerly married ten or more years
  • Provably divorced and unmarried (unless you married again after age 60). 
  • Not entitled to a Social Security benefit on your record that’s higher

How Widow Benefits Are Calculated

calculating survivor benefits

Determining the extent of widow’s death benefits for yourself is a sad yet essential part of life. Generally speaking, these assets are calculated by considering several factors. These can include contributions to benefit plans, pensions, Social Security benefits, and other assets owned by the deceased.

Any benefits promised by an employer on behalf of their partner may be a part of, as well. That amount is typically based on a percentage of the deceased’s last salary. When possible, any additional bonuses, overtime payments, or pension contributions should be taken into account before calculating the final figure. 

The process can be complex, but it should be managed with utmost care to ensure that everything is taken into account appropriately and timely payments are made. Selecting a wealth manager to assist you can make it into a more comfortable experience. It can also help to ensure that you receive the maximum possible benefits you’re qualified for.

With the proper guidance from a fiduciary professional, handling the calculations for your death benefit doesn’t have to be stressful or complicated. Instead, it could become an easy process that helps you get the most out of the analysis process.

ViaWealth takes pride in being a fiduciary wealth manager specializing in concierge service to financially independent women. Contact us to learn more or schedule an appointment.

ViaWealth, LLC is a Registered Investment Adviser. Information in this article is for educational purposes only and is not intended to be an offer or solicitation for the sale or purchase of any specific securities or other types of investments. Investing in the securities markets involve risk of principal and unless otherwise stated, returns are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before making any financial decisions. Past performance is not indicative of future performance.

More about the author: Woody Rash

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