Originally published by MarketWatch–
This problem is especially vexing for women, who typically experience a nearly 40% drop in household income after a spouse passes away (compared to a 22% drop for men). Because women typically live longer than men, widows may have to stretch out their retirement assets over a longer period of time. And by the time women reach age 85, three out of four are widows. Social Security often is their sole source of income.
There probably is no greater financial blow in old age than the death of a spouse. That is why, since 1939, Social Security has provided survivor benefits to cushion the loss of income when a spouse passes away. But those benefits are no longer adequate for many 21st century widows and widowers to stay financially afloat. This is due, in large part, to stagnant wages, difficulty saving for retirement, and the disappearance of employer-provided pensions. In 1939, many working and middle-class households did not have two incomes. But today, both spouses typically must earn income to sustain their standard of living. When one spouse dies, household income can plummet.