Many retired couples have at least discussed how they would pay for a funeral, whether through savings, life insurance, prepaid arrangements, or money set aside specifically for final expenses. What gets far less attention is the surviving spouse finances that begin changing almost immediately after the funeral is over. A household that once received two Social Security payments may receive only one, while the mortgage, property taxes, homeowners insurance, utilities, car expenses, and countless other bills don’t disappear simply because one person died. Taxes and retirement accounts can change as well, and even something as basic as who owns the checking account can suddenly matter.
That isn’t merely a hypothetical budgeting problem. A Consumer Financial Protection Bureau analysis found that newly widowed older adults experienced an average 11% income decline even after accounting for the household becoming smaller and needing less. The same research found that 16% of newly surviving spouses lived below the federal poverty level, compared with 10% of older adults generally. Planning for death therefore shouldn’t stop with asking whether there’s enough money for a funeral. It should include whether the surviving spouse can comfortably afford the next five or 10 years.
