Divorce Impacts Women Harder In RetirementMarch 8, 2017 / by Sonny Dothard
A new study has revealed that divorce impacts women harder than their former spouses. The study also shares that the later in life women get divorced, the longer they postponed their retirement and showed that many women are forced to join the workforce again. Women also feel the brunt of the financial consequences like retaining the family home by sacrificing the retirement savings which is often a big mistake.
Increasing Divorce Rates Hitting Women Retirement
As per the National Center for Family & Marriage Research conducted by the Bowling Green State University, the divorce rates for people over 50 have doubled from 1990 to 2010. This can be a core reason behind why one in five Americans are still working even after crossing the 65-year mark. It is also the reason behind reducing rates of women retirement as they often need to get back into the workforce.
Why Divorce Impacts Women Harder: The New Study
As per the study conducted by Boston College Economist Claudia Olivetti and Mathematical Policy Research’s Dana Rotz, the later a woman gets a divorce, the longer she would be working full time in life. The survey data was collected by interviewing over 56,000 women. It found that women who got a divorce before 30 were in better position than women who got a divorce in their 50s. There was a ten percentage point gap between the latter working full time from ages 50 to 74 as compared to the former.
Rotz and Olivetti wrote that divorce often has long-running implications for older women’s work, marital and retirement decisions. Women who were born in the 1950s are 19 points more likely to work full time after crossing the 50-year mark as compared to women who were born in the 1920s. The researchers say that the 11 percent difference is explained by the changes in the marital status.
Divorce has financial consequences like legal fees, court costs, splitting the assets in two, maintaining two rents, two electricity bills, etc. Women often make the mistake of giving up their retirement assets to get money to maintain a home post-divorce, especially if they have children. Expert financial planners believe that this puts women way behind in the retirement savings and overall has a severe impact on women retirement. So they should try to avoid taking this drastic step in the future.