Problems with Retirement after Divorce

There are matters facing women that make it difficult to retire after divorce, especially if you’re middle-aged or close to retirement. Unfortunately, this is the reality for many women in America today. There are various factors that cause this problem and contribute to the continually dwindling figures in women’s retirement funds. It’s important to understand these issues then speak to a financial advisor so you can work out a plan to retire when you want.

Why Retirement after Divorce May be Difficult for Women

  • Women tend to outlive men, which is great in many respects, except when it comes to retirement after divorce. The average person retires at the age of 65. For the average woman, this generally points to another 20 years for their retirement (according to the CDC). This means women have to be a bit smarter planning their retirement than their male counterparts that only have to plan for another 10-15 years.
  • You also can’t go by averages alone. When women turn 85 they make up almost the entirety of that age bracket. Due to high medical costs that are often paid out-of-pocket, many women find themselves living in poverty with huge amounts of debt.
  • Another reason women struggle with retirement after divorce is their average lower income. It’s no secret that there’s an unjust gender gap when it comes to income. Studies suggest that, on average, women make about 77 percent of what men make. After a divorce, it can seem like an immense struggle to make up that difference and start to save for retirement after divorce. This makes it even more important to plan ahead.
  • Another study suggests that women are out of the workforce for 12 years throughout their lifetime. Obviously, this limits both social security and personal savings potential. This statistic is usually due to some family-related issues or goals. The need to develop a plan increases the larger that figure becomes because you’re more at risk for a late retirement.

How to Plan for Retirement After Divorce

Many of these issues come to the surface when a couple is going through their divorce and splitting up assets in court. The judge will try to decide a fair amount to help whichever party is struggling the most. However, if you’ve been out of the workforce a while, you need to use all your available time to plan for the future. It’s a wise investment to seek a financial advisor to make a plan that works for you.

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