Money tips for widows and widowers
By Jay MacDonald • Bankrate.com

The sudden loss of a spouse is one of life's most devastating experiences. But the struggle to survive it, especially financially, can be almost as severe a test.

Because most of us prefer to avoid the subject altogether, it is hardly surprising that we are typically unprepared to suddenly go on alone.

"You want to curl up in a ball and have somebody else make all the decisions for you," says Kerry Hannon, author of Suddenly Single: Money Skills for Divorcees and Widows. "But this is the worst time to do that. You need to force yourself to make your own decisions."

Memories and money
Statistics show that the plight of the surviving spouse is largely a woman's ordeal. According to the U.S. Census Bureau, of the 56 million Americans aged 55 and older, 32 percent of women and only 9 percent of men were widowed in 2000.

Women are at a financial disadvantage on several fronts when their spouses die. Statistically, they earn 73 cents on the dollar compared to men and the gap widens with age, according to the Women's Institute for a Secure Retirement (WISER). The time women spend out of the work force to raise children or care for aging parents often results in smaller Social Security payouts, and also costs them in pension accumulation and lost promotion chances.

Hannon also says most women save too little of their income (about half of the 3 percent men save) and invest too conservatively and too late.

"Women don't start investing until they are in their late 30s or early 40s, while men tend to start in their 20s," she says. "In their 20s, women tend to spend on clothes or a nice apartment. They lose on compounded interest by starting so late."

Considering that today women are likely to live into their mid-80s on average, the combination of meager retirement reserves, declining earning power and lack of investing experience could mean their resources will give out before they do.

But with a little guidance, the suddenly widowed can gather the pieces of their lives and learn to fly solo.

Flying lessons
In most cases, widows will face three transition periods:

• Attending to immediate practical concerns -- will take one to two weeks;
• Handling financial and legal concerns -- can take from one week to several months;
• Settling tax concerns -- which can take one to two years to resolve.

Addressing immediate needs might better be termed "initial recovery." This is no time for hasty decisions, according to Alexandra Armstrong, a financial adviser with Armstrong, Welch & MacIntyre and author of On Your Own: A Widow's Passage to Emotional and Financial Well-Being.

"In the first few months, even if you think you're thinking rationally, and even if you know a lot about finance, you're not going to have your head totally on," she says.