The Widow’s Tax Trap

When one spouse passes away, life changes in so many ways. 

On top of the emotional loss, there’s often a tax surprise that catches people off guard. 

It’s called the Widow’s Tax Trap.

Here’s what happens. 

After a spouse dies, the surviving partner’s income might go down, but the tax brackets shrink even more. 

A couple that used to file together now has to file as a single person. 

That means the same income can suddenly be taxed at a higher rate. 

Things like Social Security, investment income, or IRA withdrawals can make the problem worse.

Think of it like driving on a two-lane road that suddenly narrows to one. 

There’s less room to move and traffic, in this case taxes, backs up fast.

The good news is there are ways to plan ahead. 

Some couples look at converting part of their IRA to a Roth while both are still alive and in the lower joint brackets. 

Others make sure their account titles and beneficiaries are updated. 

It can also help to do a quick tax review to see the best order to take money from different accounts.

A little planning can go a long way. 

The goal isn’t just to lower taxes later, it’s to help both spouses enjoy a smoother, more comfortable retirement together.