The couple had begun meeting about an estate plan, but Ryan was still left with a deluge of financial tasks, including transferring accounts and sorting out Social Security options. “It was overwhelming to deal with, especially when you’re grieving,” says Ryan, now 66.

On top of the emotional trauma, many surviving spouses must also cope with financial losses. Women who are widowed—in the U.S., 75 percent of bereaved spouses are women—experience an average individual income drop of 11 percent annually, according to a 2020 report published by the Federal Reserve Bank of Chicago. All too often, the financial setbacks of widowhood are unexpected. Some 41 percent of widows say they had not engaged in any financial planning prior to their spouse’s death, according to a 2024 Thrivent survey.

If you’re facing a financial crunch after your partner’s death, it’s important to avoid rushing into major decisions; panic is not a good incubator for sound money choices. “Take a deep breath, then break down the tasks one by one,” says Cindy Hounsell, president of the nonprofit Women’s Institute for a Secure Retirement. To help you sort through what is already a trying time, here are some tips for overcoming the financial challenges of widowhood.

When a Social Security beneficiary dies, their retirement benefit ends. So if both spouses were collecting monthly payments, one of those streams will dry up.

If you’re the widowed spouse, however, you might be able to receive a survivor benefit that’s higher than your own benefit. (Note that the longer a person waits to claim Social Security, up until age 70, the larger the potential survivor benefit that person will leave for a surviving spouse with lower earnings.)

This survivor payment, unfortunately, is unlikely to match your previous income if both you and your spouse were receiving benefits. And if you claim survivor benefits before reaching Social Security’s full retirement age (FRA)—67 for those born in 1960 or later—the monthly benefit will be reduced.

To be eligible for survivor benefits at all, the surviving spouse must be 60 or older, married to the deceased for at least nine months before the time of death, and not remarried before age 60, though there are some exceptions. Survivors who are disabled may qualify at age 50. If you are caring for children from the marriage who are under 16 or disabled, you may be eligible at any age for the benefit.

What to do: Contact Social Security to find out what survivor benefits you can claim. Call several times to make sure you’re getting consistent guidance, advises Lexington, Kentucky, financial planner Melody Townsend, one of whose clients was misinformed by a Social Security representative. Some people might be better off claiming their own retirement benefits first and delaying survivor benefits; for other people, the reverse might be true. You may want to hire a financial planner to help with your claiming strategy, or use one of the free or low-cost claiming calculators at maximizemysocialsecurity.com, opensocialsecurity.com or troweprice.com/socialsecurity. Ryan took her survivor benefit before FRA and plans to switch to her own retirement benefit at age 70, when the amount maxes out. “Your claiming strategy needs to be based on your own financial circumstances,” says Tom Belding, a financial planner in Chatham whom Ryan consulted.

Surviving spouses often face a so-called widow’s penalty—paying taxes at higher rates, even though their income may drop after the death of the spouse. A key reason is the status shift from married filing jointly to single filer. (You can still use married filing jointly status in the tax year of the spouse’s death.) “Single filers have tighter brackets,” says Mark Luscombe, a CPA and principal analyst at Wolters Kluwer Tax & Accounting. For example, a married couple filing jointly with $75,000 in taxable income would fall into the 12 percent federal tax bracket in 2025, while a single filer would land in the 22 percent bracket.

There are a couple of exceptions. If you have minor dependents, you have a two-year period when you can still file at joint rates. And if you are caring for older or disabled relatives, you may be able to file as head of household, which is a bit more favorable than single filing status, says Luscombe.

Adding to the tax bite, your standard deduction will be cut in half. Married couples filing jointly receive a standard deduction of $30,000 in 2025, but single filers get a standard deduction of just $15,000; those numbers are higher for people 65 and older.

What to do: Talk to a tax adviser or other financial professional after your spouse’s death. (A “fee-only” financial planner will charge only for advice and won’t be motivated to sell you particular financial products.) “There may be tax opportunities that present themselves,” says Gary Schatsky, a financial adviser and attorney in New York City. Through planning, you might be able to improve your financial situation and reduce your tax liability. You may also want to take advantage of your lower married filing jointly tax rate, while you have it, to pull money from your 401(k) or IRA. That could reduce future required minimum distributions (RMDs).

When selling a jointly owned home, couples may be able to exclude $500,000 in profits from income. As a survivor, you have to sell the home within two years of your spouse’s death to claim that $500,000 exclusion. To be eligible, the couple need to have owned and lived in the home at least 2 out of the 5 years preceding the death.

After that, you can apply only your share of the exclusion, or $250,000, if you sell. Still, at least half the home will get a so-called step-up in cost basis after the spouse’s death, which will reduce the amount of profit and tax on gains, says Luscombe. (In community property states, both halves of the home get this step-up.) To make sure the cost basis is adjusted for capital improvements, such as a new roof or addition, you’ll need detailed records.

What to do: Taxes are only one consideration when it comes to where you want to live. If you can continue to maintain your home, and you prefer to remain where you are, that may be your best option. And if you’re planning a move, take the time to research your choices. “There are costs to relocating, and finding another affordable home may be difficult,” says Stacy Francis, a financial planner in New York City.

When couples jointly use a credit card, one spouse is generally the primary account holder and the other is the authorized user. Typically the account is canceled when the bank learns of a cardholder’s death, so it’s a good idea for each spouse to be the primary account holder on at least one credit card.

Surviving spouses may see a slight drop in their credit score; a 2023 study conducted by researchers at Ohio State University found an average drop of 10 points among the recently widowed. “The bigger threat to your credit is late or missed payments,” says Emily Green, head of wealth management at Ellevest, a women’s financial planning firm. Those late or missed payments could cause a sharp drop in your score, and they will also remain on your record for seven years.

What to do: Ideally, you’ll have an up-to-date record of your spouse’s financial information, including account numbers and passwords, which will let you stay on top of bills. If that isn’t so, you’ll need to check on any debts or required payments by combing through bank statements or calling companies.

“Fraudsters often search for the names and addresses of widows or widowers in probate documents or obituaries,” says Marc Lescarret, a financial planner in Rockaway, New Jersey. A criminal may reach out to you via phone, text, email or official-looking postal mail. Common tactics include pretending to be a Social Security employee who needs your personal information to prevent your payments from stopping, telling you that you’ll have to make a premium payment in order to collect on a life insurance policy, or claiming your deceased spouse owed a debt that must be repaid. Having lost a life partner, you may also be susceptible to romance scammers.

What to do: “Put financial safeguards in place,” says Lina Supnet-Zapata, an aging life care manager and private professional guardian in Austin, Texas. Freeze your credit account at the three major credit bureaus (Equifax, Experian and TransUnion). Screen your calls. Be skeptical of unsolicited pitches, especially those seeking personal information or money, or offering you an investment opportunity. For messages that seem legitimate, call the provider directly using the contact info in your account statements, not the contacts supplied in emails or texts or over the phone. If you suspect a scam, call the AARP Fraud Watch Network Helpline (877-908-3360).