Few married couples are aware of the significant financial pitfalls of the solo years. Even fewer retirement plans adjust for those years.
Yet, in every married couple one spouse will experience the solo years. For many of them the period will last longer than five years.
Women primarily experience the solo years, but many men will face them.
The solo years are the period after one spouse passes away. They also are the period when retirement plans are most likely to fall short or come apart.
Consider these major changes in household finances and management to which most surviving spouses must adapt:
* One Social Security benefit will end.
* Other sources of income, such as pensions and annuities, might end or be reduced.
* Some household expenses are likely to increase. People often are hired to do chores and activities that one spouse used to do or both spouses did together.
* Income taxes are likely to increase, even after income declines, because the surviving spouse has a different filing status.
Of course, some surviving spouses face other changes and adjustments unique to their situations.
The federal income tax burden is a very significant and often surprising change. It is likely to increase, even when the household income declines are one spouse dies. Some refer to the change as the widow’s tax, because women are more likely to survive their husbands.
It is more accurately called the surviving spouse’s penalty tax. The less income declines, the more significant the tax penalty is.
This isn’t a separate penalty in the tax code, such as the penalty for underpaying taxes. It’s a consequence of how the tax code handles marital status changes.
When both spouses are alive, the couple’s tax return filing status is married filing jointly. A surviving spouse is allowed to use the married filing jointly filing status only for the year in which the other spouse died.
Beginning the first full year after one spouse passes away, the surviving spouse’s filing status changes to single. The married filing jointly status is the most beneficial while the single filing status is comparatively unfavorable.
(Most widowed retirees don’t qualify for the favorable surviving spouse filing status.)
Here’s how the change in filing status affects a surviving spouse.
In 2026, taxpayers who are married filing jointly will stay in the 12 percent tax bracket until their taxable income exceeds $100,800. But a single taxpayer will stay in the 12 percent bracket only until taxable income exceeds $50,400. The 22 percent tax bracket applies to a married couple filing jointly until taxable income exceeds $211,400 but for a single taxpayer the ceiling for the 22 percent bracket will be taxable income of $105,700. (The break points of the income tax brackets change each year because of inflation adjustments.)
Surviving spouses with above-average income also might see their Stealth Taxes increase. Stealth Taxes are additional taxes or reduced tax breaks that are imposed as modified adjusted gross income (MAGI) increases.
Examples of Stealth Taxes are the inclusion of Social Security benefits in gross income, Medicare premium surtax (also known as IRMAA) and 3.8% net investment income tax.
Some Stealth Taxes are imposed at the same level of MAGI regardless of tax filing status. But the MAGI threshold changes with filing status for others.
In 2025, a single taxpayer with begins to pay the Medicare surtax when MAGI exceeds $106,000. But a married couple filing jointly avoids the surtax until MAGI exceeds $212,000.
A newly-widowed taxpayer whose MAGI doesn’t fall by 50% could pay more Medicare surtax than when both spouses were alive.
A surviving spouse could be hit with a triple financial whammy.
Income declines because of the loss of one Social Security benefit and perhaps other sources of income. Expenses are likely to increase, because people might be hired to perform chores the deceased spouse handled. Federal income taxes (and perhaps state income taxes) will increase because of the change in filing status.
In 75% of married couples, one spouse will outlive the other by at least five years. In about 50% of couples, one spouse will outlive the other by at least 10 years, according to the American Society of Actuaries.
Financial plans for married couples need to anticipate the widow’s tax penalty and other difficulties of the solo years.
You might decide to spend less in the preceding years to ensure more money is available during the solo years. Some people will buy permanent life insurance to provide a lump sum of tax-free cash to the surviving spouse.
Another strategy is to increase future tax-free income, such as by converting all or part of a traditional IRA to a Roth IRA.
Pay the taxes now at the lower married filing jointly rate to provide tax-free income in the future when the surviving spouse is likely to be in a higher income tax bracket as a single taxpayer.
While both spouses are alive, they should discuss other issues, such as whether the survivor should sell the marital home and move to a smaller or less expensive residence. Ideally, the spouses fully discuss these issues together instead of leaving the survivor to make such decisions while grieving.
