Are Widows More Comfortable Spending Income than Assets?

Among married opposite-sex couples at retirement age, 63 percent of wives outlive their husbands, and widowhood is expected to last 12.5 years. At a husband's death, the median widow keeps about 70 percent of the couple's prior income, below the roughly 79 percent needed to maintain the same lifestyle as a single-person household. Closing that gap means spending from savings.

David Blanchett, Jean Chatzky, and Michael Finke test whether widows are willing to do that. Using Health and Retirement Study data from 2000 to 2020, they analyze 870 widowed retirees (647 women and 223 men) with at least $100,000 in financial assets, with a separate cut for those holding $1 million or more. The results bear directly on how couples structure income before the first death.

Key Takeaways

• Widows spend nearly every dollar of lifetime income they receive, at both the $100,000 and $1 million asset levels. Widowers spend about half of each dollar.
• Widows and widowers both spend far less from savings than they safely could, and women spend slightly less from savings than men.
• Widows become more income-focused with age, as the share of safe spending they take from savings declines.
• The authors' planning implications: make sure lifetime income continues after the first death, consider annuitizing a larger share of wealth, and bring both spouses to the planning table.