Will Your Retirement Plan Withstand the Death of a Spouse?

On this episode of The Long View, we chatted with Kathleen Rehl, an author, educator, speaker, and certified financial planner. After her husband died, Rehl transformed her grief into a mission, helping others navigate widowhood, legacy planning, and purposeful aging.

Here are a few excerpts from our conversation with Rehl, the author of Moving Forward on Your Own: A Financial Guidebook for Widows.

Slow Down Before You Choose Where to Live

Christine Benz: What are some of those irreversible decisions [that a widow might make]?

Kathleen Rehl: Housing. Sometimes widows will say, “I just can’t live in this place anymore. I walk into the living room, and there’s that big blue chair where Bob used to fall asleep every night, and I know he’s never going to be there, and so I’m just going to go.”

And sometimes that’s a situation where an adult child says, “Oh, Mom, move in with us. We don’t want you to be alone.” Even though the son lives halfway across the country, and she doesn’t have any friends there, she doesn’t have any connections with her medical providers, she doesn’t have her church connection, all those kinds of things, and she may lose a lot if she just makes the jump.

I had one case where the widow was planning on moving in, and I said, “I thought you didn’t get along so well with your daughter-in-law.” And she said, “Well, they’ve talked, and it’s going to be all right.” And I don’t know if it would have been all right. We slowed the process down. She decided to wait, to not go right away, and her son wound up taking a job like six months later in Silicon Valley. So, she would have had a double move to compound the grief. Housing is a big one.

Can You Stay in Your House? Consider the Risks

Benz: When you think of clients as you help them look into the future toward widowhood, potentially, were there any financial decisions that you helped them make that were commonalities across a number of your clients?

Rehl: Where would they live if they were on their own? And some of them did say, “Well, I would stay right here.” It depended on her age, too. If she were a widow who was in her 80s, we would talk about what kinds of risks that meant if she was going to stay on her own. How was she going to handle maintenance? How would she handle care needs? And some would say, “Well, my kids will take care of me.” Well, do your kids know that that’s what the plan is, that they will take care of you? Or not?

And I had that conversation, as I mentioned to you before, I’ve remarried. I have three stepchildren, one biological son, and had that conversation and with a son who said, “Well, of course you could move in here with us, Mom, if you needed more care.” His wife wasn’t so sure about that. A stepson said, “Yeah, you could move in with us, but we wouldn’t be very happy about it because it would change our lifestyle a lot.” And he was being honest with me on that.

I’ve created a matrix that shows different places where you could live, aging in place at home, or you could live in a rental 55-plus community, or you could live in a continuing-care retirement community, or there are some other levels, too. And then what dimensions you’d look at—what’s at risk? What’s the upfront cost going to be? What kind of support are you expecting from others? There’s a whole variety of things. I used a software program that put in the activities that you were going to do, and it projected what the money was going to look like. And so, we would just pull out if it was going to be the wife who was surviving or the husband, pull out their information, so it wasn’t a part of it as of next year, and then what the numbers looked like, if the numbers worked.

That was just the numbers part, but then there were also other parts like the emotional, the social, what gives you joy, and what are your values. Those kinds of things were important, too.

When I was widowed, I closed my practice for several months. When I reopened it, I only accepted widows as new clients, or couples who were looking to that time ahead when there would just be one of them left. And there were several couples who became new clients because of that. I remember interviewing one couple, and he was very astute. He had spreadsheets, and he had all the money and the rest. He knew everything. I said, “Well, I’m really surprised that you want to work with me because you’ve got it all down pat.” He said, “I do, but my wife doesn’t. And she refuses to talk to me about these money issues. She said, ‘It’s boring, and I’d rather do things with my grandkids than pay attention to this.’ So, I want our time together to work with you to help educate her about the things that she needs to know.”

And so, that’s what we did in that foundation year, and my meetings were always fun, and they were interesting and pulled in what she wanted to know more about. And by the end of that foundation year, if a couple decided, “Well, no, only one of us is going to come to the meeting,” then it was acceptable. But they both had to come to the meetings in the foundation year to go through it all. And we did holistic, comprehensive financial advising. It was not just in investments, far beyond that, but at the end of that year, she wanted to continue, and indeed, it was five or six years later that he died.

And I can remember the phone call where she got in touch with me and said, “He’s gone, and I just want to tell you, Kathleen, I’m OK. I feel confident about the money situation. I understand where we’re at. And that was so good that he brought me in on those things.” So, that’s the biggest kind of a tool, just awareness, education.

What About Life Plan Communities?

Amy Arnott: You have talked about some of the issues involved in housing decisions, and I think you personally are currently living in a continuing-care retirement community, also known as a life plan community.

Can you talk a little bit about some of the pros and cons of CCRCs as a housing option and how retirees can decide if that would be a good housing option for them?

Rehl: Yes. And when I had my planning practice, this was an issue that I did bring up and discuss with all of my clients: Going forward, where will you be living? And it’s not just picking a pretty place to live, a fancy apartment. It’s really a life-care and risk-management and family-impact decision in addition to a lifestyle difference.

And so, with many of those clients, and they arrived at the decision, yes, staying in their own home was not going to be a real viable issue, and some of them identified CCRCs, and we went and visited some of them, and I had developed a checklist of things to look at—everything from the financial stability of the organization to their connectedness with well-care and fitness programs, lifelong learning, the health system, all these sorts of things to look at. It was about when I turned 75 that my husband and I started having conversations along this line about what we were going to do, and he kind of was just going to go down the path, “Well, I’ve had this house forever, forever, and I’ll just go and continue with this.”

But a big impact for us was that some friends who are about our age suddenly went into a downward spiral, and they had done no planning whatsoever. And fast-forward to it’s like three years from the point that it began, and she is in an Alzheimer’s unit, and he is in independent living but keeps bouncing in and out of the hospital and is probably going to be in assisted living very soon. They live way far away from family members. It’s been very, very disruptive for that family. And so, looking at that close friendship and how that’s affected their family situation, it’s not a good situation at all. At age 75, we started our own thinking and visited several places, picked where we wanted to be, got on the waiting list, and as of six months ago, we are now here, and I love it.

Benz: That’s great to hear. We had a previous guest, Harry Margolis, make the comment that age 75 is a really good time in life to reevaluate housing choices. It sounds like your experience syncs up with that.

Valentina Djeljosevic contributed to this article.