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Financial planner's own experience helps her guide widows in money matters

Financial planner Kathleen Rehl of Land O’Lakes has written a book to help guide women through the minefield of becoming a widow, Moving Forward on Your Own: A Financial Guidebook for Widows. Rehl, whose husband, Tom, died in 2007, works exclusively with widows.

STEPHEN J. CODDINGTON | Times

Financial planner Kathleen Rehl of Land O’Lakes has written a book to help guide women through the minefield of becoming a widow, Moving Forward on Your Own: A Financial Guidebook for Widows. Rehl, whose husband, Tom, died in 2007, works exclusively with widows.

After the attack on the World Trade Center, Land O'Lakes financial planner Kathleen M. Rehl found herself wondering about the hundreds of police and firefighters who perished — and the widows they left behind.

But it was only when her own husband, Lutheran pastor Tom Rehl, died of liver cancer in 2007 that an idea born in the horror of 9/11 crystallized into reality. Rehl decided she would take no more new clients unless they were widows like herself.

The United States has almost 12 million widows with an average age of just 56. If the trend holds, 70 percent of baby boomer wives will outlive their husbands. Many will suffer financial decline.

But widows are also a potentially powerful economic force.

Over the next half century, an estimated $41 trillion will be passed on. Women will inherit much of that, either from parents or husbands.

After surviving a tough time emotionally, Rehl, 64, became a go-to expert on the financial challenges facing widows. She was recently quoted in the New York Times, and her book, Moving Forward on Your Own: A Financial Guidebook for Widows, has been recommended by Consumer Reports Money Adviser, the AARP Bulletin and others.

Rehl talked to the St. Petersburg Times about ways widows can improve their financial well-being.

Are there financial steps people should take before a spouse dies?

The best gift you can give each other when still healthy is to talk about these things. Knowing what passwords and PINs are on accounts. What's in the safe deposit box. Going through estate documents to make sure things are up to snuff. Annuities — that's not controlled by a will. Life insurance and retirement accounts like IRAs — that's not controlled by a will. It's important to be sure beneficiaries are named correctly.

You said that one time, after Tom died, you couldn't even remember your Social Security number. What does that say about a new widow's ability to deal with financial matters?

Initially, when in that shock phase, you're almost immobilized. I encourage widowed clients to bring along a family member or a friend to be a second pair of ears to hear things they might miss in the shock of the moment. When I do a meeting, I write all the notes out for them.

You suggest ordering at least 15 certified copies of the death certificate from the funeral director or health department. Why so many?

Lots of places need it. If you have an IRA account that was in your husband's name and you want to roll it over into yours, that financial institution is going to want to see it. When you file for death benefits on an insurance policy, they're going to need it. If you're retitling property interest, they're going to need it.

If you have a joint checking account, you don't want to change those right away because there will be little checks that come in. I had a check that came in three years after Tom's death. It was a mutual fund and there was some class-action suit, so here comes this check for $14 and payable to him.

What about Social Security? Pensions?

In some cases, I've found an employer, a couple of places back where the husband worked, and there was some little policy that was still in place. With Social Security, some funeral homes will actually start that process for the widow. Depending on age and if she's still working, she can apply for Social Security benefits as a widow as early as 60.

How about health insurance, always a huge concern?

She may be eligible to continue on through her husband's plan, though that's less and less likely. If she's still working, she is going to want to get on her own work plan. If she's not employed and is not able to get on her deceased husband's plan and is not 65 yet (the age of Medicare eligibility), she's going to want to look into an independent policy and, unfortunately, those are very expensive.

You say in your book that a new widow might not want to pay off a mortgage immediately. Why?

For one thing, she doesn't really know how long she's going to stay in that house. Also, the house is an illiquid asset. If she has some liquidity, she needs to keep that. And right now, if she put money into a house it's like investing in an asset that may actually be declining in value. With one woman, I said, "Let's put the life insurance (proceeds) into a money market account,'' and we'll set it up so that from that $60,000, money came to her each month and was used to pay the mortgage. She still had that mortgage deduction on her taxes.

You've spoken of the "not-so-gentlemen'' callers who prey on widows. Were there men who seemed to be after your money?

There was one guy, he went through bankruptcy and was only working part time. I dated another fellow for a couple of months and he said, "Would you take care of me the same way you took care of Tom?'' I thought this was a strange question so I said, "Do you have undisclosed medical issues?'' It turned out there were big problems. I think that older gentlemen, maybe not consciously but subconsciously, want somebody to take care of them when the time comes.

What can widows do to check out someone?

Go to People Finder (www.intelius.com) and for a few bucks you can get their address and then with the address you can find out what kind of neighborhood they're living in. For a bit more, you can do background checks including criminal records. You can see if there are foreclosures or liens against their property.

Should widows always think about remarrying?

When you're a senior, marriage may or may not be a right way to go because of all the legal entanglements. The family is getting upset (thinking): Is he going to wind up with assets that normally would have passed to us?

In your book, you ask readers to rate their life values in order of importance — do you value stability or are you more adventuresome? Do you want to be rich or be generous with your money? Why is this important?

Research shows that people who are in synch with their values are more content than those who are not. So if somebody says security is real important, maybe they shouldn't be holding a very risky portfolio. I have a widow whose husband was a stock picker, even in Asian stocks that were constantly shifting in value. She really valued security, and she saw this was not really a safe, secure asset. That was something I helped her realize (and decide): I need to diversify out of this.

I'm working with another gal right now setting up a charitable gift annuity through the national body of her church. She will be funding it with some cash, and then she will get back a flow of income as long as she lives. After death, the principal will be freed up to fund a scholarship fund for women. She's getting a lot more income than she would off a CD and it's safe and secure, and she feels good about that.

For widows who can't afford a financial planner, what are good sources of information?

They can read my book. (laughs)

There's a book by Bert Whitehead, Why Smart People Do Stupid Things with Money: Overcoming Financial Dysfunction. That's very good book that gets into a lot of real meaty issues. If she's comfortable with a computer, she can do a free financial assessment and get a full plan for $199 from Peoples financialadvisor.com. It's a wonderful service.

To sum up, what's the one biggest mistake new widows make?

Going too fast. No. 1 rule: no major decisions for a year. While there may be some things with investments that may need to be changed for liquidity and cash flow, she can take her time to learn what her options are. I've had widows come to me and say: "The wolves are circling, I'm being pressured to buy this investment.'' Many insurance companies will temporarily put payouts into a checking account. Many of these are paying 2 percent, and you can keep money in there until you understand what your options are.

Susan Taylor Martin can be reached at susan@sptimes.com.

About the book

Moving Forward on Your Own: A Financial Guidebook for Widows by Kathleen M. Rehl, 80 pages, available for $13.97 from www.kathleenrehl.com.

Financial planner's own experience helps her guide widows in money matters 09/23/11 [Last modified: Monday, September 26, 2011 6:50pm]

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