Protect Future Widows

Delay retirement. When the husband dies, the couples Social Security benefit is cut by between one-third and one-half, the report says. The couples private pension benefit either disappears completely or is reduced. One way to offset that problem is for the husband and wife to retire later. Retiring later may provide for a higher employer pension benefit, if applicable, and offer the opportunity to sock away additional savings for retirement, said Wendy Roy, director of survivor financial counseling services at Ernst & Young. A higher earnings level can also lead to a higher Social Security benefit.

Start a business together. This gives a couple a chance to open a company retirement plan, including an individual 401(k) plan, said Jacob Herschler, vice president at Prudential Annuities Marketing.

Cover health care costs. If the husband and wife are still working, they should consider buying long term-care insurance policies, Herschler said. They should do so when they are healthy enough to qualify and when they are in their 50s or 60s when the premium costs are lower. In addition, couples should consider how they will fund health-insurance costs if they retire before becoming eligible for Medicare.

Talk finances. Husband and wife should work as a team on all financial matters of the household, says Paul McClatchy, vice president of financial planning at eMoney Advisor, a unit of Commerce Bancorp. No matter if it includes the household budget, a new car purchase or saving for a future goal; both ought to be involved in the decision making process, he said. Its fine if one spouse is more comfortable with running the household finances, but the other spouse ought to know at least what thought process went into making financial decisions. Most importantly, both spouses ought to know where the important financial documents are kept, including wills, deed to the house, and insurance policies.

Fund a spousal IRA. Husbands, if their wives don't work, ought to consider a spousal IRA or Roth IRA for their wives, said Herschler. A nonworking spouse can make a deductible IRA contribution of up to $4,000 for 2007 ($5,000 if age 50 or older as of the end of 2007) as long as the couple files a joint return, and the working spouse has enough earned income to cover the contribution.

Delay taking Social Security. A husband could increase his Social Security benefit by 5.5 percent to 8 percent per year by waiting until age 70 to begin taking it. To be sure, couples will need to find ways to replace that income during what's called the bridge period. But a recent Prudential Retirement research report suggests that older Americans could withdraw money from their IRAs to replace the Social Security income until its needed. The big benefit of delaying Social Security is this: A widow or widower, at full retirement age or older, generally receives 100 percent of the workers basic benefit amount, plus the delayed retirement credits, according to the Social Security Administration. Social Security has undergone significant changes that make the value of delaying the receipt of Social Security benefits greater than in the past, according to the Prudential Retirement research. Specifically, the increase in the full retirement age and delayed retirement credits can result in significantly greater benefits from delaying Social Security. . . . With the additional benefits of survivor protection, inflation adjustments, low expenses, and customization options available, delaying Social Security (for at least one member of a retiring couple) and taking income from personal retirement savings during the bridge period becomes a very efficient strategy of providing retirement income.

Consider buying a deferred annuity. It may be worthwhile if there's concern that the surviving spouse would have difficulty managing investments to generate the stream of income necessary to support her standard of living, said Ernst & Youngs Roy.

Look at asset titles, beneficiary designations. Retitling of assets may reduce the time and cost associated with probate and, if done correctly, could play a role in insuring that each spouse takes advantage of their respective estate tax credit. An effective estate-planning strategy is best implemented with the assistance of an estate planning attorney and the couples financial planner, Roy said.

Call in an expert. Lets face it, some people cannot, do not, and will not try and educate themselves on matters of financial well-being, said McClatchy. The husband must realize this and start working with a financial professional in order to ensure that the surviving spouse will have some financial continuity and someone to help guide her.

Social networking. Ensure that the widow has a network of knowledgeable and trusted friends to rely upon, said McClatchy. That way, the widow has more than one person to lean on.