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Life After Paychecks: leave the lesson and go back to the map

Widowed: The First Year and the Single-Filer Squeeze

  1. Warm-up
  2. Story
  3. Learn
  4. Play
  5. Quiz
  6. Remember
  7. Try it
  8. Finish

About this lesson

About 15 minutes · 5 quiz questions

The big idea: After the first year, a widow or widower often pays more tax on less income. Re-plan accounts, taxes and documents.

This lesson is for people who have lost a spouse or partner, and for those helping them. Go gently, and skip anything that doesn’t fit today. You can read the short summary instead.

Lesson outline

The big idea: After the first year, a widow or widower often pays more tax on less income. Re-plan accounts, taxes and documents.

The story: Ruth’s second tax season

A year after losing a spouse, Ruth sees a higher tax bill on similar income, and friend Grace helps Ruth sort out the IRA, Medicare premiums and paperwork.

  1. Narrator: It’s been more than a year since Ruth’s spouse, Sam, died. Ruth’s income is about the same as before.
  2. Ruth: Then why is my tax bill bigger, and my Medicare premium too?
  3. Grace: After the year of death, you file as single. The brackets are narrower, so the same income can mean more tax.
  4. Narrator: Ruth also chooses what to do with Sam’s IRA, retitles accounts and asks Social Security to use the newer income for Medicare.
  5. Ruth: And I’ll update my own beneficiaries and re-run my plan as one person.

What you’ll learn

  1. Retitle, and choose the IRA path

    Retitle joint accounts in your name. For your spouse’s IRA, you can roll it into your own IRA or keep it as an inherited IRA. Which fits depends on your age and when you need the money.

  2. The single-filer squeeze

    After the year of death, most widows and widowers file as single, with narrower brackets and a smaller standard deduction: $16,100, vs $32,200 for a couple. Same income can mean more tax.

  3. Medicare premiums can come back down

    Higher income can raise Medicare premiums. A spouse’s death is a qualifying life-changing event, so you can ask Social Security to use your newer, lower income. The card links to how.

  4. Update and re-plan

    Update your own beneficiaries and documents. Re-run your budget and retirement plan as one person. If most accounts were joint, start building credit in your own name.

Key words

filing status
how you file your taxes, like single or married filing jointly
spousal rollover
treating a late spouse’s IRA as your own
widow’s penalty
higher tax as a single filer on similar income

Common questions

I have a child still at home. Do I still file as single?
Maybe not. A surviving spouse with a dependent child may use a special filing status for up to two years. The IRS link on the card explains it.
Should I make big changes this year?
Only the ones that can’t wait. Many people take a year before selling a home or making big investment changes, and get a second opinion first.

Remember this

Same income, single filer, more tax. Plan for it.

Try it: Re-plan as one person

  1. Run the public retirement calculator using your own income and savings now.
  2. Write down how the result differs from your plan as a couple.
  3. List the accounts, documents and beneficiary forms that still need updating.

No account: use the public Retirement Calculator (/tools/retirement-calculator).

Live facts

Numbers that change over time, with when they were last checked and where they come from.

Builds on

Practice with real numbers:Try the retirement calculator

Lessons teach how money works. They are not financial advice.