The Importance of Wealth Planning for Women Over 50

The Importance of Wealth Planning for Women Over 50

Women in their 50’s and 60’s who find themselves newly single due to divorce or the death of a spouse may run into some unique challenges when it comes to wealth planning and making the transition to financial independence.

Facing retirement as a single person probably requires some strategy modifications. In fact, even before making the decision to retire, you will likely need to reconsider what to plan for and how much to put away. You may need to adjust your retirement planning in order to achieve your financial goals for retirement.

In addition to your own retirement savings, take into consideration any funds that you might receive from your ex’s retirement plan as part of a QDRO (Qualified Domestic Relations Order). Or, if your spouse has died, the proceeds from their insurance policy must be factored in.

Looking Towards Retirement

Retirement planning for women over 50 requires more “life planning” than it does for men for both health and economic reasons. Since women live longer than men, on average, the risk of running out of money or outliving their money is much greater. And as they age, women will be faced with additional health concerns that are costly, such as long-term care. In addition, because women become widowed more often than men, they carry the financial burdens of losing their spouses’ incomes. 

When planning for retirement, there are a number of things that you can do to address these issues.

  • Make annual contributions to your workplace retirement plan if you have one; 
  • Consider making catchup contributions each year to your retirement plan;
  • Make sure you understand the process for claiming Social Security benefits as a survivor if you are widowed;
  • If divorced, you can collect benefits based on the earnings of your ex-spouse if:
    • The marriage lasted for 10 years or more; and
    • You have not remarried.
    • If these requirements are met, you can claim 50% of your ex-spouse’s benefits, or 100% if/when they pass away. The minimum age to collect these benefits is 62.

Many women find managing investments and their retirement assets to be especially challenging if they weren’t involved in that aspect of their married life. Therefore, it’s important to take stock of your investment assets and make sure that those assets are distributed in such a way as to provide for your financial growth and safety as a single individual.

Other issues to consider are:

  • Tax planning
  • Life insurance
  • Estate planning
  • Lifestyle changes

Planning for the future

For single women over 50, wealth planning needs to go hand in hand with planning for healthcare as well as long-term care. “Estate Planning for Women Only,” offered by the Newport Beach law firm of Jeffrey M. Verdon Law Group, is an insightful read which attempts to address some of the common concerns and misunderstandings regarding estate planning for women, risk management, and risk mitigation.

Posted in Updates.