Imagine planning for decades to help secure your financial future, only to watch a substantial portion of your savings disappear to unexpected taxes after losing your spouse. For millions of women, this scenario isn’t just a possibility—it’s a reality many face without proper preparation.
Tax planning isn’t merely about numbers on a form. It’s about helping to preserve your independence, defending your family’s financial security, and safeguarding the legacy you have worked so hard to build.
Women are increasingly becoming the primary stewards of wealth, with projections showing they will inherit more than $51 trillion in the next two decades. Understanding how taxes can affect women differently than men—particularly regarding longevity, widowhood, and legacy planning—can be essential for securing your financial future. Read on for four aspects of tax planning that women need to be aware of if they want to help protect and growth their wealth.
1. The Widow’s Penalty
One of the most overlooked financial risks women face is the “widow’s penalty.” This penalty occurs when a spouse dies, and the surviving partner faces a steep tax rate increase when going from filing jointly to filing single.
For example, take a couple with $85,000 of taxable income, and then one spouse dies. The surviving partner may go from the 12% tax bracket (married filing jointly) to the 22% bracket (filing single). According to 2025 IRS tax brackets, this shift can result in a nearly doubled tax bill, going from around $10,200 to $18,700.
And it doesn’t stop there! As the surviving spouse, you may also face higher Medicare premiums due to IRMAA surcharges. A couple with $225,000 in income would pay $6,000 in IRMAA surcharges, while a surviving spouse could pay $7,380 alone. As women often outlive their partners, this tax burden frequently falls on them.
This is why planning ahead is essential. You could potentially lower your tax bill by utilizing strategies like Roth conversions and strategic withdrawals while married to help you take advantage of the more favorable married filing jointly brackets before widowhood.
2. Longevity Planning
According to the National Center for Health Statistics, women live five years longer than men on average. This is true even with lifespans continuing to increase with every generation. Living longer means you must plan for more years of retirement income and more years of taxes.
That’s why we consider longevity management strategies to help ensure your money will not run out. In short, think about what challenges older age may present for you and how to pay for it all. And remember that during that increased lifespan—and lengthier retirement—more years of living and portfolio growth means a growing tax bill.
Make sure you understand what income your portfolio will provide monthly and what your Social Security options are. Additional longevity considerations include: healthcare and caretaking expenses, possible downsizing plans, relocation, tax strategies, and legacy planning. In general, it costs more to live longer, so it’s important to plan for longevity to help ensure you do not run out of money.
3. Driving Down Lifetime Taxes
Although not discussed nearly enough, lifetime income taxes are some of the most significant expenses that retirees face and may be the most significant expense in retirement. Working with a tax-savvy financial advisor can potentially save you a significant amount of money through understanding the tax code and making tax-smart decisions. This is especially important because your extended lifespan means you need more income for more years, while potentially paying higher tax rates as a single filer.
Additionally, recent legislation has created new urgency around retirement account planning as part of your overall estate strategy. The SECURE Act dramatically changed how retirement accounts can be passed to the next generation. Instead of allowing beneficiaries 30-plus years to withdraw inherited funds (the old “stretch” provision), most non-spouse beneficiaries now must empty inherited retirement accounts within just 10 years.
This can force your children to take distributions during their peak earning years, potentially pushing them into higher tax brackets and significantly reducing the value of your legacy. This makes strategic IRA management an essential component of modern legacy planning for women who want to maximize what they leave behind.
By using a long-term tax minimization plan, you can help reduce this onerous tax burden through income smoothing, Roth conversions, and asset location strategies. The sooner these strategies are implemented, the greater the potential tax savings over your lifetime.
4. Estate and Legacy Planning
Making sure that you have enough assets to support your lifestyle is playing “good defense.” However, once you know that you have enough assets to support your lifestyle, then you may want to maximize your legacy for beneficiaries by going on “offense.”
After a spouse passes, many women are left managing the family’s wealth, philanthropic giving, and legacy. However, women in this stage of life often need more specialized services from their advisor and other professionals to meet their goals. Most women tend to prioritize holistic financial planning, including longevity, estate, and charitable giving.
Proactive estate planning is especially important now. The current estate tax exemption ($15 million per person in 2026) is generous but could drop in the future. For couples with combined estates above $20 million to $25 million, now is the time to act. Waiting may result in fewer options and higher taxes for your heirs. Popular strategies like family limited partnerships and Grantor Retained Annuity Trusts (GRATs, which are irrevocable trusts that minimize taxes on large financial gifts) may face limitations in the future, so consider implementing these strategies sooner rather than later if appropriate for your situation.
Additionally, charitable giving can help reduce IRA and estate taxes. A Bank of America Study shows that 85% of affluent households’ giving decisions are made or influenced by women. If charitable giving is a priority for you, ask about tools like qualified charitable distributions (QCDs), donor-advised funds (DAFs), and charitable gift annuities (CGAs) that allow you to support causes you care about while reducing income and estate taxes.
You should also take the time to schedule a family meeting to discuss your legacy goals. Open communication helps ensure your wishes are understood, helps prevent future conflicts, and can empower the next generation to make informed financial decisions aligned with your values.
Get Started on Your Plan
Due to women’s increasing longevity and their tendency to outlive their partners, tax planning is fundamentally a women’s and family issue. By working with your financial advisor to address the widow’s penalty, prepare for a longer lifespan, and create a meaningful legacy, you can secure your financial independence while ensuring your life’s work continues to make an impact for generations to come. The strategies you implement today may determine not just the taxes you pay tomorrow, but the financial confidence you enjoy throughout your lifetime.
Debbie Taylor, is not affiliated with Cetera Wealth Services LLC. Any information provided by this individual is provided entirely on behalf of CWM, LLC and is in no way related to Cetera or its registered representatives.
Cetera Wealth Services LLC, exclusively provides investment products and services through its representatives. Although Cetera does not provide tax or legal advice, or supervise tax, accounting or legal services, Cetera representatives may offer these services through their independent outside business. This information is not intended as tax or legal advice.
The opinions contained in this material are those of the author, and not a recommendation or solicitation to buy or sell investment products. This information is from sources believed to be reliable, but Cetera Wealth Services, LLC cannot guarantee or represent that it is accurate or complete.
This article is not intended to provide specific legal, tax or other professional advice. For a comprehensive review of your personal situation, always consult with a tax or legal advisor.
Some IRAs have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.
Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes. Converting from a traditional IRA to a Roth IRA is a taxable event.
Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Carson Partners, a division of CWM, LLC, is a nationwide partnership of advisors.
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