What happens when one spouse suddenly has to manage it all.
Women generally live longer than men, which means that, in many households, wives are statistically more likely to become the surviving spouse and, in time, the sole decision-maker over the family’s finances.
While this is a straightforward demographic reality, it has important financial planning consequences, particularly for couples where one spouse has historically taken the lead in managing investments, banking, tax, insurance, retirement income and day-to-day financial administration.
In many marriages, especially among older generations, the division of financial responsibility has often evolved naturally rather than deliberately.
One spouse may have been more interested in markets, more comfortable dealing with advisors, or simply more inclined to manage paperwork, online banking and investment decisions, while the other may have focused on different responsibilities within the household.
There is nothing inherently wrong with this arrangement, provided both partners understand the broader financial picture and are able to step in if circumstances change.
The difficulty arises where one spouse has had little meaningful involvement over many years, and is then expected to assume full responsibility later in life.
For women who find themselves managing household finances for the first time in their 70s or 80s, the task can be substantial, not because they lack ability, but because the financial environment they are entering is often complex, highly regulated and increasingly digital.
Understanding investment statements, managing income drawdowns, authorising payments, dealing with banks, engaging with the South African Revenue Service, reviewing medical aid options, updating estate planning documents and making decisions around liquidity, tax and long-term care requires more than access to information – it requires context, confidence and familiarity with the structures already in place.
Avoiding financial continuity risk
From an advisory perspective, this is where many financial plans reveal a weakness that was not immediately obvious while both spouses were alive.
While the plan may be technically sound, tax-efficient and well-structured, if only one spouse understands how it works, who is involved, where information is held and why certain decisions were made, then the household has a continuity risk.
In retirement planning, continuity matters enormously because decisions around income, capital, tax, healthcare and estate planning are interconnected, and a surviving spouse should not have to reconstruct that framework under pressure.
A useful example is that of a living annuity. A drawdown decision is not simply a monthly income choice, as it affects the sustainability of the investment, the client’s tax position, future liquidity, estate planning and the ability to fund increased healthcare or assisted living costs later in life.
Similarly, a decision to sell an investment, move funds offshore, assist adult children financially, change medical aid options or alter the structure of bank accounts can have consequences that are not always obvious when considered in isolation.
These are not decisions that should be made without proper guidance, but they are also not decisions from which women should be excluded until they are forced to make them alone.
Technology can be an obstacle
Technology has made this planning gap more pronounced. Financial administration now relies heavily on online banking, secure portals, app-based authentication, electronic signatures, password management, two-factor verification and digital communication from banks, insurers, investment platforms and revenue authorities.
Although these systems can be efficient and secure, they can also create practical difficulties where the surviving spouse does not know which email address is linked to an account, which cell phone receives one-time PINs, where passwords are stored, how to access online statements or how to distinguish between legitimate correspondence and a fraudulent request.
This digital layer also increases the risk of fraud, particularly where someone is unfamiliar with the process that should be followed.
Fraudsters often exploit uncertainty around banking, investments, estates, tax refunds, policy payments and account verification, and older clients who are newly responsible for financial administration may be more exposed if they are unsure who to contact or which instructions are legitimate.
Impersonation scams, phishing emails, fraudulent WhatsApp messages, payment diversion attempts and fake investment opportunities are increasingly sophisticated, and prevention depends not only on vigilance but on having clear household protocols and trusted points of contact.
Another layer of communication
In our experience, annual review meetings are one of the best opportunities to ensure that both spouses understand the structure and purpose of the plan, even where one spouse remains more interested in the details than the other.
Advisors need to ensure that both clients are actively engaged in the discussion, understand the income strategy, know where assets are held, and have an established relationship of trust with the advisory team.
It’s vital that both spouses understand the essentials in respect of what they own, what they owe, how income is being generated, what risks have been insured against, how liquidity is managed, where important documents are stored, who the key professional contacts are, and what steps should be taken if one spouse dies or becomes incapacitated.
These are practical conversations that can be built gradually over time, and they are far easier to have while both spouses are healthy and able to participate.
A financial continuity file can be invaluable in this regard. Whether physical, digital or both, it should contain details of bank accounts, investment platforms, retirement funds, life policies, short-term insurance, medical aid, tax practitioners, estate planning documents, debit orders, online access guidance and key contacts.
The purpose is not to create another layer of administration, but to ensure that the surviving spouse, together with the adviser or trusted family support where appropriate, can locate the information needed to keep the household functioning.
Simplification should also be considered as couples age, especially as many households tend to accumulate unnecessary complexity over time. This could include old bank accounts, outdated policies, small investment holdings, duplicated debit orders, unused credit facilities and legacy products that no longer serve a clear purpose.
While some complexity is unavoidable, unnecessary complexity increases the risk of errors, missed payments, duplicated costs and poor decision-making, and a simpler, better-documented structure can make a meaningful difference to the surviving spouse’s ability to manage effectively.
Ultimately, longevity planning is not only about whether the money will last, but about whether the person most likely to be left managing it has been properly included, informed and supported.
For women, who are statistically more likely to outlive their spouses, this should be regarded as a central part of retirement planning rather than an afterthought.
A sound financial plan should build capability across the household, ensure that both spouses understand the decisions being made, and create a structure that can continue to function well when one partner is no longer there to manage it.
Source: moneyweb