6 nasty surprises women face when they divorce

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An astonishing 46% of divorced women recently surveyed by the online marketplace Worthy said divorce comes with financial surprises. I am a Certified Divorce Financial Analyst and collaborated on this survey, and I can report that the women I work with who are divorcing often tell me that they too have had nasty financial surprises as a result of this investigation. experience.

In the Worthy study, Building a Financial Fresh Start, 1,785 adult women were interviewed in three stages: those whose divorce is “on the horizon”, those who are in the process of getting divorced, and those who describe themselves as “divorced. and determined ”. Some 22% of women were 55 or older; most of them were already divorced.

In my practice, the six unpleasant surprises that divorced and divorced women often encounter during their divorce proceedings are:

  • Not knowing the total amount of their marital debt, including primary mortgage, home equity line of credit, auto financing, credit card debt, 401 (k) loans, and student loans

  • Don’t expect to have to return to the job market

  • Assuming child support and / or alimony would be higher or last longer

  • Assuming they can keep the marital home

  • The exorbitant cost of health insurance

  • Underestimating the cost of divorce

When asked if survey participants had had “financial surprises” during a divorce, 38% of women aged 55 and over answered yes. Although this result was not encouraging, it was significantly lower than that of the younger age groups, nearly half of whom said they had experienced such surprises.

See: More women pay child support (as more women become breadwinners)

Before entering into divorce settlement negotiations, it is imperative that women know their net worth as a couple and can quantify joint and separate expenses. Women who remain financially ignorant during their marriage will find life after divorce more difficult than it should be.

Financial roles and responsibilities during marriage

To better understand the impact of divorce on women’s finances, the survey asked women about their financial role when they were married. Some have abdicated all financial responsibilities (such as earning money and handling bills and household investments) to their husbands. Surprisingly, younger women were more likely to abdicate control of all financial matters to their husbands than older women. While 18% of women aged 55 and over had ceded financial control to their husbands when married, this was significantly less than the roughly 23% of women between the ages of 18 and 54 who had.

Don’t miss: Divorce after 50: what I wish I had known before

But after a divorce, women must take responsibility for all household chores, including earning money, saving and investing for the future, and paying the bills. By sharing responsibility for all of these functions when married, women will have a better chance of maintaining the same financial standard of living after divorce.

Financial fears and future direction

Across all age groups, the majority of women surveyed said their greatest financial fear about divorce was living on just one income. # 2: the cost of divorce.

However, there was a big difference between age groups when we asked women about their future financial goal. Only a significant portion of the 55+ age group (38%) was materially preoccupied with retirement, twice as many as millennials. Likewise, 22% of baby boomer women mostly concentrated in over the next five years on building their investment portfolio, compared to only 12% of Generation X women and less than 10% of Generation Y women.

Women today are living longer than ever before, so I advise divorced and divorced women to get some investment education. This will help reduce the possibility that they will outlive their money. Some may need to reduce their expenses or increase their earning potential in order to contribute to an investment or retirement account each year.

See: That’s why baby boomers are divorcing at a staggering rate

Ironically, despite the focus of baby boomer women on retirement planning and investing, 72% of them did not consider their already worn engagement ring to be a financial asset. Little did they know that selling their rings could give them money to invest and supplement their retirement savings.

Good to know that divorce can bring at least one pleasant financial surprise.

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