All of us experience important life events. Sometimes you have time to anticipate and plan for them (weddings, reunions, retirement). Occasionally they happen without warning. Both types — planned and surprise — require you to make decisions. Your financial future is often the focus.

This could be true for anyone, but women especially still often are thrust into unfamiliar territory when dealing with life-changing events like the death of a spouse or the sale of the family home. In those circumstances, you might find yourself with a large amount of money. You have to make decisions about how to make it last. You will be approached by agents or advisors from banks, insurance and real estate companies or financial service providers. They will all offer solutions. You need to educate yourself and decide what is best for you.

Start by deciding your priorities: Where do you want to live? Do you want to travel, baby-sit the grandkids, volunteer, earn a full- or part-time salary or change careers? All will help you determine how much money you will need throughout your lifetime.

Life-changing events
Life-changing events

Diversify your interests and income

You probably will choose several of those options. In the same way, you should not invest 100% of your money in one approach. Figure out which combination of investments and annuities will be the best way to take care of yourself and your needs into the future. It should be a thoughtful, gradual process that results in peace of mind and the knowledge that you will have enough money throughout your life to deal with planned and unplanned events.

My advice has always been to tally your income, the money you can count on to be there every year. That might include Social Security payments, a pension, or dividends and interest from securities. However, if these income sources do not cover your basic living expenses, I would suggest you look at income annuities before embarking on a plan to periodically tap your invested savings. Withdrawals from savings are not the same as income because your money then has the potential to run out during your lifetime. In addition, since an income annuity can generate high rates of cash flow, you may find that a larger portion of your new savings is available for investing.

Questions for your advisor

You should also factor in tax implications .You may find that the money you receive – especially money you inherit – has a step up in its cost basis, meaning any appreciation in the securities, a home or life insurance that occurred over the years is not taxed. If you choose an income annuity, that higher cost basis will be excluded from tax as payments are received, which would produce an attractive after-tax cash flow.

Some advisors argue against all annuities. Ask them whether the savings they want to invest in the market will result in income that will last the rest of your life – not just your average expected lifespan. The longer you live, of course, the more likely it is you will have large unreimbursed health care expenses.

Long-term care insurance for major costs should be part of every retirement plan, but consider some form of a deferred income annuity designed to start paying you late in retirement to cover some of those late-in-retirement costs. When you know you will receive that check every year for the rest of your life, you can feel more comfortable about how some of these costs will be covered.

Know all your options

There are many ways to create financial stability. It can seem overwhelming at first, especially if you are also dealing with an accompanying life-changing event. But you don’t need to make all your decisions at once. Take the time to educate yourself, based on your age and situation, so that you can make thoughtful decisions that benefit you for the long run.