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Widows and widowers, who are already processing grief, face a host of financial challenges in the aftermath of losing a spouse.
These can include paying for medical bills that were left behind, covering funeral costs, and the administrative tasks of retitling joint accounts.
Many also face a drastically different financial future.
- Their income tax bracket may change as a newly single filer, resulting in higher federal taxes on the same or lower income.
- They may experience higher cost burdens without a second income to share expenses.
- They experience an average 10 point decline in their credit score following their partner’s death, according to research.1
- They may assume the role of bill payer and investment account manager for the first time.
In the case of retirees, the surviving spouse must also learn to live on one Social Security check instead of two when their spouse’s benefit comes to a stop, making it potentially more difficult to make ends meet. Although they may now qualify for a higher Social Security survivor’s benefit that is equal to 100 percent of their deceased spouse’s benefit. Nearly 6 million widows and widowers receive Social Security survivor’s benefits, according to the AARP.2
By educating themselves about their options and working closely with a trusted financial professional, however, widows and widowers can gain control over their assets, delivering peace of mind at a difficult time.
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Financial planning tips for widows: Sit tight
As for major financial decisions, Iammarino suggests the newly bereaved sit tight. After they have taken care of immediate responsibilities, such as paying their monthly bills and insurance premiums to ensure coverage remains in force, they should take a moment to breathe.
Moments of stress are no time to make major life decisions, such as selling your house, quitting your job (if you’re still working), liquidating investments, or making irreversible decisions with your retirement accounts, pension plans, or Social Security benefits.
That includes purchasing new financial products or reinvesting life insurance death benefits into a vehicle you may not understand.
Single seniors, in fact, are particularly vulnerable to costly investment mistakes and predatory lenders.
“You should absolutely consult a financial professional before making any large-scale liquidations,” said Iammarino. “The last thing you want to do is make a poor investment decision and/or trigger a large taxable event.”
- Widows and widowers will need to set up meetings with their attorney, tax advisor, and/or financial professional to get a clear understanding of how the loss of their spouse may impact their financial plan. For example, they may need to downsize to more affordable housing, return to work, or adjust their retirement portfolio withdrawal rate to minimize the risk of outliving assets. (Discover more: The ideal withdrawal rate)
- Those under age 65 who had been covered by their deceased spouse’s employer health insurance plan should evaluate their health insurance needs, including COBRA coverage.
Widows and widowers should also take the time to educate themselves about their investment options.
“Every financial vehicle has pros and cons,” said Iammarino, adding that it is imperative that all investors understand the purpose of any financial product they buy. Is it designed to generate income or growth, or to provide diversification? Are the underlying assets conservative or aggressive? What is the cost of your investment and is your financial professional getting a management fee or commission? Is it liquid?
“These are all questions your financial professional should [address] prior to you selecting your financial vehicles,” he said. “Things have radically changed, and we can plan for that, but your risk tolerance may be different than your spouse’s was. You need to come up with your own strategy and build a new foundation, so you understand your new overall plan.” (Discover more: Understanding your risk profile)
Financial help for widows: Tax changes
Normally, when you experience a change in marital status, your tax-filing status changes, too. That can result in a higher tax rate, the loss of certain tax breaks, and a smaller standard deduction. Widows and widowers may also see a change in their provisional income equation, which determines the tax rate for their Social Security benefit. That can mean a higher tax bill even on a smaller income.
“We’ve looked at multiple case studies where you’re making less income as a widow or widower, but paying more in taxes,” said Iammarino.
That said, the Internal Revenue Service makes certain allowances for widows and widowers to help ease their tax burden in the years immediately following their spouse’s death.
For example, they may be eligible to use the “married filing jointly” status in the year their spouse passed away if they previously qualified for that status and if they did not remarry.3
For the following two years, they may then be eligible to use “qualifying widow(er)” as their filing status, which entitles the surviving spouse to use joint return tax rates and the highest standard deduction amount. It does not enable the surviving spouse to file a joint return.
A tax professional can offer guidance on what moves may be most advantageous.
For example, a younger widow may not want to roll her deceased spouse’s IRA over into her own account because she would not then be able to access those funds without penalty until she turns age 59 ½.
On the other hand, if she is over age 59 ½ and wishes to maximize the tax-deferred growth potential of her husband’s IRA, she may instead wish to roll the IRA in her own name, which would enable her to delay taking required minimum distributions until she reaches age 73.
Social Security Survivors Benefit
Social Security benefits come to a halt when we die. That can amount to a 50 percent drop in monthly income for a surviving spouse, even as their fixed expenses — like rent, mortgage, utilities, and property taxes — remain largely unchanged.
(If you haven’t yet notified the Social Security Administration that your spouse passed away and are still collecting his or her checks, do not cash them. The government will eventually ask for that money back.)
Widows and widowers who are eligible, of course, would still be able to collect a Social Security benefit beginning at age 60 based on either their own earnings record or a survivors benefit based on a percentage of their deceased spouse’s earnings record — although claiming benefits before their full retirement age permanently reduces the size of their monthly checks.
They can collect the full amount to which they are entitled by waiting until their full retirement ageat 67.
And they can permanently increase the size of their monthly checks by delaying Social Security benefits further still. For each month they delay claiming benefits beyond full retirement age, they receive a credit that increases the size of their future checks until they reach age 70, when the benefit of delaying any longer disappears. (Discover more: Social Security filing strategies for the widowed)
“Before a surviving spouse selects a Social Security claiming strategy, however, they would be wise to consult an expert who can help them maximize their benefit amount,” said David Freitag, a MassMutual financial planning consultant.
For example, widows and widowers who collect a survivors benefit, but also qualify for a benefit of their own, may potentially collect a survivors benefit in the early years of retirement and leave their own Social Security benefit to accrue delayed retirement credits. They could then switch to their own (higher) retirement benefit as late as age 70 — a good way to give themselves a raise in retirement. (Related: The difference between spousal and survivor Social Security benefits).
Those with a disability that started before or within seven years of the worker’s death may begin collecting benefits as early as age 50. They may also receive survivors benefits at any age if they care for a minor child, under age 16, of the deceased worker, or if that child is disabled and receiving Social Security benefits based on the worker’s record.
Estate planning for widows: Update your assets and estate plan
The loss of a spouse also necessitates a thorough review of the surviving spouse’s assets and estate planning documents.
An attorney can help update your will, living will, powers of attorney, HIPAA (Health Insurance Portability and Accountability Act) form, and beneficiary forms for your life insurance policy and tax-favored retirement accounts (IRA and 401(k)) as needed. (Learn more: Wills and the basics of estate planning)
Russ Thornton, a financial professional and founder of Wealthcare for Women in Atlanta, Georgia, suggested that widows and widowers may also need to update the title on their home and other assets.
“Contact your bank, financial institutions, and investment management firms to have all your jointly held bank, brokerage and investment accounts retitled,” he said on his blog. “In most states, joint accounts are considered to be “Rights of Survivorship,” but you should confirm this before making any changes.”
Similarly, he suggests surviving spouses refer to their checkbook, online banking profile, and/or loan statements to make a list of all their bills, expenses, loans, and other financial obligations, separating items by ownership. That should include a summary of accounts that are solely in their name, solely in their spouse’s name, and those held jointly, giving them a road map for next steps. (Related: What happens to debt after death?)
Then, contact all the financial institutions where they have joint accounts to have their deceased spouse’s name removed. And notify any businesses or service providers with accounts exclusively held in their late spouse’s name, letting them know that their account is now subject to probate and will be handled by the estate. To help facilitate, you can provide their attorney’s name and number for future reference.
Conclusion
The loss of a spouse is a painful experience, to say the least, one that requires time to grieve and time to heal. As they come to terms with their suddenly single status, however, widows and widowers can help alleviate a significant source of stress by getting their financial tasks organized and taking steps to secure their future.
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Frequently asked questions about widows and finances…
Q: What financial steps should I take immediately after my spouse dies?
A: Start with the essentials: keep insurance premiums paid, cover monthly bills, and notify Social Security. Beyond that, resist major financial decisions until you have bandwidth to make informed choices.
Q: When can a widow or widower start collecting Social Security survivor benefits?
A: You can begin collecting Social Security survivor benefits as early as age 60 — at a reduced amount. Waiting until your full retirement age (66 to 67, depending on birth year) lets you collect 100 percent of your deceased spouse’s benefit. If you’re disabled, you may begin as early as age 50. The right timing depends on your individual situation and should be reviewed with a Social Security expert.
Q: Do I need to update my estate plan after my spouse dies?
A: Yes — and soon. You’ll need to update your will, powers of attorney, health care directives, and beneficiary designations on all retirement accounts, life insurance policies, and bank accounts. You should also retitle jointly held assets to reflect your sole ownership. An estate planning attorney can guide you through this process and help avoid complications down the road.
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This article was originally published in July 2019. It has been updated.
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1 University of Wisconsin-Madison, Center for Financial Security, “How Does the Death of a Partner During the COVID-19 Pandemic Affect the Economic Security of the Surviving Older Adult? Evidence From Credit Panel and Labor Force Participation Data,” 2021.
2 AARP, “Social Security Resource Center: How do survivor benefits work?” Dec. 3, 2025.
3 Internal Revenue Service, “Publication 559 (2025), Survivors, Executors, and Administrators.”
