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Hi everyone and welcome to another episode of LIMRA and LOMA's Insider Insights podcast. I'm Tina Beckwith. Now today we're talking about a topic that sits at the intersection of demographics, financial planning, and human emotion, widowhood. Women are expected to be among the largest beneficiaries of the great wealth transfer.
Research estimates that fifty four trillion dollars will transfer to widows through two thousand and forty eight with more than ninety five percent of those assets going to women.
Now at the same time, millions of women will face the loss of a spouse. It's a major life transition that often brings emotional, financial, and practical challenges.
Now we may ask, you know, how can financial advisors better support these women during one of the most vulnerable periods of their lives?
And with that, joining me today is Suzanne Norman, fellow at the LIMRA Retirement Income Institute and author of the research paper, A Widow's Walk to Financial Confidence.
Suzanne, thank you so much for joining us today.
Thanks for having me.
Now, so curious, what inspired you to write this paper and why do you believe widowhood really deserves more attention from financial services?
Thanks, Tina. Yes. It's it's really personal. I am a Gen X born in nineteen sixty six, and I have, a lot of friends that are living this.
I haven't yet, but I was on vacation with some dear friends, a husband and wife, clear Gen Xers, who within one year lost each of their fathers. And being with them for a week and observing everything that they were going through and the fact that their mothers were very ill prepared financially. Fortunately, there were resources, but as far as decision making, one had actually never written a check. And so listening to them gave me this insight.
And, of course, as a fellow and a coach and someone who's been in the financial services industry for over thirty years, we're really just beginning to see this wave. And one of the things that I I really was attentive to was research that we've all heard about, which is McKinsey back in twenty twenty talked about the fact that about seventy percent of widows leave their financial professional after the death of a spouse. And to me, emotionally, I thought, what what a what a difficult decision to be making at one of the most stressful, and in fact research says the most stressful life event that we'll ever experience, the loss of a spouse.
And to be changing advisors at that period of time seems like there must be a way to prevent it or at least help.
Yeah. Well, first of all, I'm so sorry to hear about that experience, for your friends. That's, to your point, very difficult time and to be making a big change like that on top of what they're experiencing, that's a lot to navigate.
Now thinking about the demographics, you know, research highlighted that an estimated fifty four trillion dollars will transfer to widows through two thousand and forty eight and that's majority going to women.
You know, why is this wealth transfer such an important issue for financial advisers to understand today?
Yeah. There there's a lot to unpack here, but I think most most importantly, and we talk about this in the industry all the time, money in motion. Right? The the life events where we move money from one place to another, and a lot of times that's the sale of a business. It could be retirement assets. But looking at this fifty four trillion dollars, and we've got about eleven point seven million widows in this country growing every day.
So to me, that just spoke to this this massive money in motion event. And in the industry, we do know that surveys tell us a lot that women are not necessarily feeling seen and heard, and some of that is and I put it in the paper by choice, meaning that they have in the silent and baby boomer generation said, you know what? That's not my job. He he likes the investing.
He'll do it. And so realizing that we've got these gaps of education, of confidence, I also talk a lot about the fact that confidence and competence aren't always the same, and women actually when we measure it are great investors, but there's been this abdication. Ubs uses this term in their research. So recognizing all this money moving and maybe people that aren't necessarily equipped and have the skill set that they need.
Yeah, that makes sense. And to your point, many financial professionals might focus more on the financial implications of widowhood, but your paper emphasizes that this is more of an emotional journey as well.
So what do financial professionals often miss when they think about supporting their clients who may be widowed recently?
Yeah. It's a good point to make because when we think about people that are drawn as professionals to the industry, a lot of them, of course, love the investing and and the math, as I call it. And so it's kind of this this head, this intellectual. And I think we all know the best advisers recognize that they're gonna be a combination of kind of head and heart.
Right? So they're using that empathy. And so I think what we're seeing is recognizing that with this grief that happens, of course, with the loss of a spouse, we've gotta kinda lean into that qualitative emotional work first as professionals. Of course, the math and the and the money is very important, and we'll get it we'll I can talk about that as well.
But recognizing that these these emotional intelligence skills of active listening, of curiosity, not necessarily, of course, using a lot of jargon, particularly when we know that grief can actually have physical impacts with people for their cognitive abilities, their ability to make decisions. So there's a lot there that I think if we start kinda down here and thinking about the emotions, we're much better off and and better outcomes for for for clients.
Yeah. And it makes so much sense. Right? The head and the heart, they off they work together. So I love how you bring that forward in terms of the map and really needing to understand where someone might be emotionally.
Now in your research you also cite that many women historically deferred those financial decision making responsibilities to their spouses. What challenges does that create after they've lost their spouse and how can financial professionals really help build that confidence that you talked about as they're going through these transitions?
Yeah. I'm glad you addressed that. One of the things that I see as for the shared burden or shared responsibility is that as a financial professional, if you're working with a couple, and, again, I'm focusing in this paper on mostly the silent and the baby boomer generation, you you have to listen to the couple. And if it was, say you know, the the direction was, he you work with him, not me.
It's understandable that there would be a little bias that's built up there. But one of the things that is missing oftentimes, even if you disagree with that seventy percent leave, and most of my financial professional friends, you know, don't necessarily agree with that number, but it it does speak to trust and and the fact that maybe there isn't a strong relationship there. So when I'm coaching people about how to really interact with advisers, it's making sure that you are, you know, seen and heard and that there are those open ended questions that I I kinda mentioned before with that active listening and curiosity.
So even if during the marriage, before the widow widowhood event, you know, advisers remember to ask those questions to both people. And when you're doing maybe diagnostics or assessments, have both of them pull it out and be just sort of pushy and nudgy because, again, if the widow is now in a relationship with an adviser where she's going through this grief and she doesn't necessarily have someone who is a linchpin in helping her navigate this new phase of solo hood, it's it's something I think that can be avoided with financial professionals adopting some more practice management that incorporates coaching skills.
Yeah. And I agree. It's so important to your point. While both partners are a part of those conversations, you know, I'm fortunate. I have those conversations. We have a fantastic financial planner and my husband and I both meet with him and, you know, I'm fortunate that I'm a part of those conversations in that. I do feel like, I'm more confident when it comes to those decisions and being a part of the process.
You know, as you think about the practicality piece of it, right? So, know, the first year checklist for widows after they've had this experience, what do you think are some of the most important things that financial professionals should prioritize during those early months following the death of a spouse? Right? How do they go about approaching those conversations?
I see this three parts. I think about the who, meaning that if this event or when this event occurs, you need to know who's that emotional support person. It could be someone in the family. It could be a friend, but, you know, getting into the who.
Also, I think the the more creative modern life advisers, as I call them, build up resource lists. So, certainly, the resource list from a professional standpoint often includes, you know, trusted tax advisers, trusted attorneys. But what about some of these resources that are out there for widows? There, I put a few in the paper, but there are definitely things that you can have as far as a referral source.
So the who is is really critical right away. The other thing is the what. So women often mean delegating those older generations the investment role, but, you know, a lot of times they are paying the bills. So my friend's example is maybe a little bit more extreme, never having written a check.
But knowing where things are and and what kind of accounts are are set up and and getting organized, is really critical. So just kind of getting a lay of the land so that what, and then the how is really, like, looking at, you know, what matters to me and going through an envisioning exercise. Now, again, some of this we have to pace properly because, again, grief has many phases and there's no direct line, but recognizing that there's going to be a reestablishing of what's important to the widow, widower. And then one of the things I do put in the longer checklist in the paper is thinking about a professional organizer because a lot of times there is downsizing.
So that might also circle back to resourcing.
So recognizing that those are important steps.
Yeah and everything you just described really talks about the broad change that someone's experiencing when an event like that happens.
And one of the other changes that they experience is a true immediate change to the household income. You know, social security benefits, pensions, retirement income streams can all be affected.
So what should financial professionals be reviewing to ensure a widow's long term financial security?
Well, again, most of the the modern advisers, I call them, incorporate planning.
But in in place of a formal plan, because, obviously, there will be revisions to that at the death of the spouse, but it's the budget. It's the inflow. It's the outflow. Understanding, as I call it, we're we're each running our own business.
It's just known as our personal life. So recognizing where the income's coming from, what the outflow looks like, again, pacing it, recognizing that sometimes, you know, that modification lifestyle modification may not necessarily be a conversation you're having in the first month, but recognizing that that we need to know the inflow and the outflow, and that budget is critical. The other thing you referenced is that reduced income. So in some cases, maybe there isn't a significant reduction because there might be plentiful resources, But for the most most people out there, most widows, they may be experiencing what's known as the widow's penalty.
And, essentially, what that connects to is that if they're both receiving Social Security checks, they will lose one or the widow will lose one. Now she may have been earning a higher check, but she's losing the lower check. If she was receiving the, the husband was receiving the higher check and she got the lower, she'll get his. She'll get the higher.
But the fact is that her expenses probably don't go down by about fifty percent. And then additionally, with her tax filing status, this could change that that net income that she's receiving. So the widow's widow's penalty is something we always want to to make them aware of.
So, income reduction is real.
Yeah. That's important lens and a part of the bigger change that you're talking about. And, you know, as you're describing it, it's one of my favorite mantras is that it's a journey and as you're thinking about describing the number of different resources that are available the timing of some of those conversations can be really important.
Now your research also notes that women often express a strong preference for guaranteed income in their retirements.
Why do you think protected income solutions can play such an important role for widows, you know, financially and serving those emotional needs as well?
Yes. That could be a full podcast. And what I often do to frame that is I do think about, at least in the United States, our financial empowerment, and it's pretty recent. If you think back or you look back historically, which I do, it wasn't until nineteen hundred that women had full owner full property right ownerships in all states. And then if we look to the Equal Credit Act, that wasn't until, obviously, the seventies that women could get a loan or credit card without a cosigner. So it's recent empowerment, I guess, is the best way to look at it.
So with that being said, when we think about guaranteed income, we, as women, are looking at these longer lifespans. So knowing that we can't outlive this money, and we've got this forever paycheck paycheck book coming out from Gene Chatsky, which I preordered mine. But this idea of income you cannot live when we have these long lifespans, there's something there. And we looked at research a few years ago that really analyzed what does protected income what a value study that that we did, and that looked at safe and secure.
That's what people are responding to. And having an income that you cannot live is important. I will say personally that I live in Boston, and there are six owners in my building. And I live with a centenarian, so my neighbor will be a hundred in August.
And so we're seeing more and more of this. So I think that women's lived experience both from that financial empowerment and that being recent and then along the lifespans. The annuities are really, I think, a solution that will fit many, many people. The one data point that I also point to, Tina, which gets back to this this adviser awareness or financial professional is that when we looked at women's interest, nine out of ten said, I I I want protected income.
But when we looked at how many financial professionals, were actually mentioning it, because forty eight percent that these these women specifically said they wanted or were interested in an annuity. So I know we mentioned pensions and Social Security. So there are lots of forms of of protected and guaranteed income, but we saw very few advisers actually mention it. So that's just an awareness gap between what women want and need and perhaps the financial professionals again having a little bit more empathy, for that that lived experience.
Yeah. Well, first of all, I'll say, you know, more power to the centurion in your building. That's amazing. I love hearing stories like that.
And yeah, you're right. I mean that guaranteed income it's almost like having your own personal pension and that forever check and like you I pre ordered my book, The Forever Paycheck and I can't wait to dive into it when it's available.
Getting back to your paper though, one section that you had really focused on Gen X daughters, who increasingly find themselves caring for the aging parents. You know, why should advisors view these daughters as an important part of the planning conversation?
Yeah. Again, so blared, but first and foremost, I raised my hand because, yes, I am a Gen X daughter.
Fortunately, my parents are are what we all wanna be in our eighties, traveling the world, dancing, having fun, healthy for now. However, when we look at the statistics, and I I do like to share this because we think about this Gen X is referred to as the forgotten generation. Gen X women are sort of the invisible generation or at least aspect because of all this unpaid care that we provide in general. So sixty percent of the caregiving for parents and children is provided by women, and the average age is fifty one.
So Gen X is right in the middle. And when I think about the the work and the and pre an important role that financial professionals play, these women have also not saved as much. So when we look at the averages, about a hundred and one thousand versus a hundred and fifty six thousand by men. Depends on how you slice and dice it, but that's the average for for Gen X women.
So they're under under saved and underprepared, and they're or and they're stressed.
So we know the levels of depression are much higher for the caregivers. So as a financial professional, clearly, financial professionals are not mental health professionals, but being, again, aware and having that empathy. And then when we think about money in motion again. So assuming that there is money left over from from these parents, and I know there's there's a lot of perspectives on that, but let's just look at that fifty four trillion again.
Preparing her for this inheritance and building that trust and relationship now is really important. So call the action for advisors.
Yeah, mean, you're pointing out, it's women can inherit twice from their spouses as well as their parents.
So you outline a number of ways that financial professionals can become those trusted partners for their widowed clients. What separates financial professionals who do that successfully and those who might struggle to retain the relationships.
Yeah. I I referenced it earlier with this idea of the modern adviser. I I wrote a paper, a couple of years ago talking about life advisers. And what I mean by that is that sometimes it can be jargon.
We talk about comprehensive wealth management. I don't know about you, Tina, but I'm from New England. And most people, if they have the money, don't really want it. And so this idea of calling yourself wealthy or having a wealth adviser, sometimes there's friction there.
So all that being said that I think that the, modern adviser recognizes the commoditization of the business, meaning that not everyone wants to do it themselves. But from being a successful investment adviser, it's kind of that's step one. So step two is recognizing that you do wanna take that comprehensive look at someone's life. Build in some of the qualitative aspects, not just the quantitative, not just the math.
Some of the advisers that I see are really I mean, they're so creative, but what they're recognizing, particularly with widows, and this is not a new idea, but I always think that it's it's showing that empathy. Sympathy is, you know, having feelings for someone, but, you know, empathy is feeling with them and doing things with them. So that Valentine's Day luncheon that I'm sure you've seen other advisers do, I think that's that's powerful. You're you're walking that talk.
Being creative and and recognizing that, yes, of course, you know, a semiannual, annual, quarterly review, whatever the client needs is important to look at the performance. But what else is out in their in their life? And so tapping into things that women and men too, but women especially like to do, you know, like to go and work in book clubs. And so advisers would start book clubs.
Having that ability to maybe, you know, tap into the emotions and, you know, maybe go on a retreat. Lots of advisers do this for their female clients now. So something maybe for widows. Maybe it's not a weekend, but it's, you know, it's an afternoon where they can do that envisioning exercise, talk about their new life purpose. And we know that with purpose, one of my passions, is that that pivot that happens at these life events is really getting the credit for holding that space for someone where they actually can tap into that that meaning, that joy. So I think those life advisers are are recognizing that their skill set, is beyond just investing.
Yeah. Well, and it sounds like it's good business and what a lovely idea. Those are great great things for someone to do.
Now as we look forward, as we look to the next decade with peak sixty five and that increasing longevity that you were discussing, the continuing wealth transfer, what do you think is gonna be the biggest opportunity for financial professionals who really want to serve women and widows better?
I think that there is so much more to a person's life than reviewing a portfolio. And one of my best friends who actually brought me into the industry back in nineteen ninety two is still in practice, doesn't have any intention to retire, is a baby boomer because she has become the quarterback in these families. So, you know, as as we all know, you can probably only effectively manage, you know, maybe a hundred households, maybe less.
Being that first phone call and and navigating for the multigen because I think most advisers know that when you're in front of a client, they're probably in front of of three clients, meaning it could be the parent, it could be the child, it could be the grandchild. So you you've gotta be thinking about certainly for having that stewardship of this wealth that we're talking about the transfer is recognizing that you play such a critical role in managing that tax professional, managing that legal professional, managing some of the other resources that we've talked about. And I think that's exciting. And and using a lot of those coaching skills I mentioned where you've got this ability to tap into the emotional intelligence of activism, curiosity, empathy.
And with this comes the reward of not only attracting these clients, but retaining them and hopefully getting those extra generations along with it.
Yeah, those long term relationships are so important.
Well Suzanne, thank you so much for sharing your insights and highlighting both the financial and the human dimensions of widowhood. You know, the numbers you shared around the great wealth transfer are truly staggering And we know that behind every one of those statistics is the person, the human who's navigating one of life's most difficult transitions. And I so appreciate your research that really offers valuable guidance for advisors who want to help their clients move from that distress or uncertainty to being more confident.
So for our listeners, I encourage you to read Suzanne's paper, The Widow's Walk to Financial Confidence. It's available through LIMRA Retirement Income Institute at limrafinpro.com. Thank you for listening to today's episode, and be sure to subscribe to the Insider Insights podcast series for more conversations with industry experts who are helping to shape the future of retirement and financial planning. And until next time, I'm Tina Beckwith.
