December 2, 2003 — Researchers at the University of Utah say that despite significant changes in the workplace to give women pay equity eligibility for retirement benefits, widowed women are more likely to be poor, compared to the rest of the continuously married population.

Besides lower income levels for women, the focus of much national research, one reason for this may be because of increased expenditures close to the death, including the increased cost of health care needs, funeral and burial costs. Cathleen D. Zick, professor, and Jessie X. Fan, associate professor, are some of the first researchers to study whether expenditures just before death were a contributing factor to post-widowhood poverty.

“The expenditures are probably one small part of the shift in economic well-being,” notes Zick, adding that they didn’t study the emotional aspects of the economic changes. “Expenditures aren’t the only reason, but they are a contributing factor.”

Fan explains that they focused on expenditure flows six to 12 months before women were widowed and then compared them to a “continuously married” control group

Zick, chair of the Department of Family and Consumer Studies, further explains that there was not much difference in health care expenditures between the Medicare-eligible widows and their continuously married, Medicare-eligible counterparts. “Those who experienced the biggest problems were those whose spouses were ineligible for Medicare prior to their deaths. These households spent the most on health care prior to the death and because they were typically younger than 65, and thus ineligible for Medicare,” says Zick. “Because the study did not have data on health care expenditures beyond one year, our estimates are conservative.”

Zick and Fan used 19 years of data from the Consumer Expenditure (CE) Surveys as well as data from the 1996, 1997 and 1998 Medical Expenditure Panel Surveys (MEPS). Some of their results are forthcoming in papers that will be published in The Journal of Consumer Affairs and Social Science Research. Their key findings include:

• Total annual expenditures are, on average, $4,606 higher for couples where a spouse is soon-to-be-deceased compared to otherwise similar healthy couples.


• Households where a spouse dies at some point (during the research period) spend $3,389 more on funerals and burial services in a six-month period around the death time than did otherwise similar households where no spouse death takes place.


• Households where a spouse dies spend about $573 less on food at home than otherwise similar households where no death takes place.


• About-to-be widowed couples spend an average of $87 more per month out-of-pocket on health care than do otherwise similar healthy couples.


• Households where the to-be-deceased spouse is ineligible for Medicare spend an average of $169 more per month out-of-pocket on health care than do otherwise similar healthy couples who are not eligible for Medicare.


• The additional overall expenditures made by about-to-be widowed households may exceed their available income and contribute to the increased risk of poverty experienced by widows.

Zick notes that the best financial planning advice is to pre-plan, or set aside money for funeral and burial expenses. “Setting aside money in an account or including a portion of savings in a life insurance policy is an excellent strategy. Make sure your family knows what you want in terms of a funeral and burial, because in crises or moments of grief they may spend more.”

Zick and Fan report that in the United States current social security death benefits, available to all social security benefits-eligible participants, are $250. Yet, according to the National Funeral Directors Association, in 2001, the average price of a funeral in the United States was $6,130, excluding the cost of a burial plot and burial charges. An online American Association of Retired Persons (AARP) report states that as of 1999 funeral and burial costs can often exceed $10,000.

Zick warns, “Prepaying funerals can sometimes be problematic. The funeral company can go out of business before you die and the prepaid packages could change. In many cases, prepaying the funeral is like giving the funeral company an interest-free loan for 20 years.

“As a society we talk about saving for down payments on houses, cars and a college education. One of the other areas we should plan for is the expense of burying a loved one,” Zick says.