Statistics show women are more likely to be widowed than men, so they need to know how to manage their finances when they are on their own to ensure their money will last.Getty Images
No one wants to think about their spouse dying before they do, but there’s no escaping an unkind reality for women: they outlive men and are more likely to become widowed sooner.
Forget for a moment the oft-quoted statistic that claims the average age for women’s widowhood in Canada is a paltry 56. (Yes, age 56.) Just this year, a newly released Vanier Institute’s Families Count report indicates a slightly rosier view of spousal death. Today, one in five Canadians over 65 is widowed, down from one in three in 1991. Better health care and advances in medical science have increased life expectancy overall.
Yet, while women are less likely to become widowed early as their husbands’ health improves – between 1980-1982 and 2020-2022 the life expectancy gap between women and men has fallen from 7.1 years to 4.5 years – women are still far more likely to become widowed than men. In 2021, 47.1 per cent of married women in their 80s no longer had a living spouse, compared with 16.6 per cent of men in the same age bracket.
For any woman wondering how she’ll manage her finances on her own, that’s sobering news. It’s also powerful information, says Sybil Verch, a financial advisor and portfolio manager with Raymond James Ltd., Private Client Group in Victoria, B.C. and author of The Female Edge.
“Statistics can work to our advantage. When you know this information, why would you turn a blind eye to it or say, ‘Well, that won’t happen to me.’ That’s a dangerous assumption to make,” she says.
Unfortunately, not only do women more often outlive their spouses, but they also save less for retirement and are less likely to make the couple’s investment decisions. Taking time off work to care for children or elderly parents can put a large dent in savings. So does a lifetime of paying the ‘pink tax,’ on goods and services marketed to women and priced higher, such as haircuts and even pink razors.
“It’s a triple threat,” says Ms. Verch. “Women, on average, earn less during their working years, spend more because of the ‘pink tax,’ and then women live longer – so they need their money to last longer.”
Luckily, there are strategies to create long-term financial security.
Step up
Janet Gray, a money coach with Money Coaches Canada in Ottawa, has seen a few horror stories in which a husband dies and his wife has no clue how he organized their money. Yes, there were pensions and investments, but finding out how to access them took time and effort when she should have been able to grieve without extra stress.
“No one cares more about your money than you. You need to be interested,” she says. “But it comes from both sides. Women need to step up and men need to invite us.”
That means if you’ve given your spouse the job of handling wealth management, it’s time to sit in on meetings with the financial advisor, or at the very least take a few hours to find out where savings are and how the bills are being paid. It’s about total transparency and openness from the get-go, particularly in second marriages that can have more complicated financial repercussions if one spouse passes away.
Make it fun and get help
Goals and dreams are great motivators to start saving and sticking to a plan. Better yet, create a money club with a few friends to build in accountability, recommends Ms. Verch.
“Nobody likes talking about death, divorce and negative things, but that doesn’t mean you shouldn’t,” she says. “Instead, switch it to a positive. What would it take for you as a woman to be financially independent and totally in control of your finances? How would that feel?”
Working with a financial planner, not just an investment advisor, can help you set your goals, dream and think big, she explains. And if you have questions, they’re only a phone call, e-mail or text away.
Expect the best, plan for the worst
That’s how Jillian Carr, founder and financial education specialist at Steady Gait Planning in Stony Plain, Alta., discusses financial planning with her female clients. She doesn’t even use the word, “retirement” and instead focuses on “financial independence.”
That means putting aside a little money each month to build three months of emergency savings, creating a will, having powers of attorney and buying enough life insurance to protect her future. But it also means discussing the nitty-gritty of accounts, advisor contact information and – most importantly – account passwords.
She practices what she preaches, creating a Google drive for her husband with this information called “I love you, but in case I die.”
“He might not know all the ins and outs of our financial plan, but if something happened to me, he knows exactly who to call, how much money there should be and where it’s all held,” she says. “It’s about making life easier when your world is blowing up around you.”