Vawn Himmelsbach

Wed, Jun 4, 2025, 9:01 AM7 min read

Consider this scenario: Paul’s wife unexpectedly passed away a few weeks ago.

Aside from the shock of losing the love of his life, he has a new source of stress he wasn’t prepared for: His wife made 65% of their household income. And he can’t afford the mortgage on his own.

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Now, Paul is wondering what to do. Should he refinance his home? Should he dip into his retirement savings to pay the bills?

While he does have some money in a high-yield savings account (about $30,000), he’ll also get a life insurance policy payout worth about $200,000. He’s been putting money into a 401(k) at work too, but he doesn’t think he should dip into that money before he retires.

So, what can he do instead?

Dealing with the death of a spouse is hard on many levels. Suddenly, you’re left without your life partner, but you also have to deal with the financial implications of being suddenly single.

Paul isn’t alone. Individual annual income falls by an average of $5,500 after the death of a spouse for at least two years, according to National Bureau of Economic Research data cited by the Federal Reserve Bank of Chicago. The rate of financial insolvency also increases after the death of a spouse.

Women tend to be hit harder than men, since women on average make less money than men. As of 2024, women earned 85% of what men earned in the U.S., according to a Pew Research Center analysis. They may also leave the workforce temporarily or permanently to raise children.

Women also tend to live longer than men — roughly six years, which can have significant financial implications.

A Thrivent survey found that more than half of widowed women experienced financial challenges, with 51% living paycheck to paycheck or struggling to manage their bills.

One major reason? Debt.

“Debt is one of the top financial challenges facing widowed women. Thirty-nine percent carried over $25,000 in debt immediately following the loss of their spouse, including 10% having over $100,000,” according to the survey.

But the same can be said of any spouse that’s making less money than their partner, as in the case of Paul.