What is the Secret to Retaining a Surviving Spouse?

Each phase of retirement offers bonding opportunities, says WealthConductor's co-founder.

By Eleanor O'Sullivan

Phil Lubinski, CFP and co-founder of WealthConductor LLC, had words of warning for advisors attending the company’s recent webinar, “Retaining the Surviving Spouse.’’

“Women control 40% of global wealth and that share is expected to grow to as high as two-thirds in the next decade.

“Women are now in control of their highest level of global wealth in recorded history and a high percentage of them are or will become the surviving spouse.

’’So why are 80% leaving their advisor?’’

By far, the biggest mistake that advisors make, said Lubinski, is holding a meeting with only one spouse present.

“In many cases, only one spouse attends meetings with the advisor. Typically, one of the spouses is not interested in “all this financial stuff.’  But it is critical that both partners attend meetings.

“When both clients are at the meeting, bonding with just one spouse is maybe worse.’’

Double the Effort

To retain clients, advisors need to understand each spouse’s primary interests.

“In a couple, there is usually the investments and assets manager, and the other is the budgeter, the one that pays the bills every month. We need to talk with both of them. Don’t just use one learning style, either, because some people are visual and other are tactile. So you need to communicate in all those areas.’’

To address each spouse’s needs, advisors can suggest that both clients bring a checklist of what’s important to them in planning for retirement.

“Another thing is to ask both partners three questions: What are you most excited about doing in retirement? What are your biggest concerns about retirement? Are there other family members that should be part of decisions during this (retirement planning) process?

“Like it or not, children exert influence on the surviving spouse and they may have an advisor that they would prefer that their parent worked with,’’ Lubinski said.

He said advisors should not overwhelm clients with a 50-page retirement plan, which they won’t read and probably won’t understand.

Instead, provide them with the answers they need — which he said an advisor can determine when both clients are engaged in the meeting and encouraged to define their wishes.

Falling Short

Even retirement plans that seem foolproof on paper can fall short, when one spouse dies before the other and adequate planning for that event is not established.

Lubinski offered an example: A couple retired with $1 million in assets, they had a $90,000 annual income goal, and the husband planned to wait until 70 to collect Social Security.

“It was a great starting point but not realistic because I can safely say, in the 35 years that I have been working with retirees, I’ve never had a situation when both spouses died at the same time.’’

So, all contingencies must be anticipated: Lubinski said retirement falls into the go-go phase; the slowing-down phase and the living-alone phase.

After a spouse dies, another planning phase is needed for the survivor, which will probably be the woman. Women outlive men by four to five years, Lubinski said.

Multiple Bonding Opportunities

“During the go-go phase, when the client is healthy and traveling and has hobbies, this phase is when it’s critical to develop a bond with the bill-paying spouse who will probably become the surviving spouse.

“Each phase offers opportunities (for the advisor) to develop a strong bond with the surviving spouse, so you need to take a close look at each of these events.’’

In the slowing-down phase, Lubinski said retirees must make a “tough decision’’: whether to age in place, downsize or move to senior housing. The surviving spouse will have different needs when living alone.

“Both my wife and I loved our home of 25 years but my wife was concerned that she would feel uncomfortable living in that home alone.

“After we made the decision to downsize, she said, “This is the home I would feel comfortable living in alone,’ so I guess she has decided that I am going first!’’

Help With Living Arrangements

Clients will appreciate advisors who read the fine print of agreements at senior living developments: Lubinski attends the initial visit clients make to these facilities and then makes a checklist of questions for the facility, before any signing is done.

Clients who prefer to stay in their home face other challenges, Lubinski said.

“An AARP study showed that 80% of retirees prefer to age in place, but in order to do that, major modifications often have to made to the home. My role is to help clients determine the viability of doing that, and where the money is coming from to pay for it.’’

A drawback of making a house livable for elderly or handicapped owners is that it can devalue the home, because, as Lubinski said, “new homeowners don’t want to purchase a house modified for disability.’’

If clients choose senior housing, advisors can help make arrangements that meet both spouse’s needs. They can provide important advice on what lies ahead in a senior housing facility, such as costs of long-term care; whether one or both will require special care such as a memory care unit, and the financial ramifications of the surviving spouse remarrying.

‘One of the Best Decisions He Ever Made’

“No matter how well organized the client is, there are a ton of decisions to be made. I had a client, an engineer who had all these spreadsheets that would make your head hurt.

“He said his wife had no interest in investments but he wanted to make sure she had a solid relationship with me so that when he died, he knew she would be well taken care of.

“‘I don’t want her looking for a financial advisor at the most vulnerable time of her life,’ he said.  On the day of his funeral, she came up to me and said, ‘When he decided that we should work together before he died, it was one of the best decisions he ever made.’”

Making Life Easier

Advisors can make surviving spouses’ lives much easier if they make the calls to Social Security, pension funds, insurance companies and banks to keep money flowing, get bills paid and benefits resumed after the death of a spouse.

“We also advise them to set money on the sidelines for when they are waiting for things to happen,’’ Lubinski said.

Critical documents such as wills and trusts should be organized and stored in a central location, using cloud-based technology, which can be made available to clients and family when needed.

“They need to have all their important documents in a central location. Information on their doctor, CPA, lawyer, insurance, all should be in there, and updated each year.’’

Clients’ children should know about these documents and their storage location, Lubinski said.

“We ask who in the family is authorized to view the paperwork, if needed, and ask them to give us a list of who they are. We send letters to those family members. That assures the kids that they won’t be financially responsible for the parents and shows them the level of care and thought in the plan. They may think, ‘You will do the same kind of work for me.’”

Additional Reading: WTC Bombing Survivor Implores Advisors to Involve Spouses in Planning

To retain a surviving spouse, advisors should avoid this behavior, Lubinski said:

“Don’t start out focusing on how much you know; focus on what they want. They don’t care about how much you know; they care about how much you care.’’

In a four-decade career in journalism, Eleanor O’Sullivan has reviewed many books on best practices for financial advisors, has written for Financial Advisor and the USA Today network, and was movie critic for the Asbury Park Press.


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