During the divorce process, most divorcing spouses’ priorities are set on making a definitive break from their partner, and moving on with their lives. If there is a long-term priority, it is probably the welfare of their children. A spouse’s own financial needs down the road tend to get a low priority. In fact, many divorcing spouses are willing to bargain away coverage of their long-term financial needs if they believe it will make a clean emotional break quicker and easier in the here-and-now.
Pittsburgh divorce attorneys usually advise their clients against this type of “bargain.” For one thing, it is hard to buy a clean, fast break. A spouse could end up paying for an easy divorce and still get a difficult one. Secondly, it is never a good idea to take a short-term view in a divorce. Many of the decisions made can have deep and long-lasting effects. A strong, long-term financial plan is essential in working out a divorce.
The importance of examining the long-term financial outlook of divorce was re-emphasized by a recent study on the financial well-being of divorced women. The study looked at around 600 women who divorced in the 1970s. What the researchers found was that divorced women tended to be worse off financially than women who were continuously married or those who remarried.
The study did not indicate the level of financial planning that the divorced women engaged in back in the 1970s. It did show, though, that these women, many of whom are now in retirement age, suffer an economic disparity in retirement benefits. Women who are divorced do not have the same Social Security benefit amounts as women who are married or remarried. Specifically, the study found the following average Social Security benefits among the women studied:
$1,000 benefit per month for divorced women
$2,000 benefit per month for divorced women who remarried
$2,200 benefit per month for continuously married women
Planning ahead may not be able to eliminate these types of financial disparities, but with no plan in place, divorcing spouses are bound to suffer the worst financial consequences of divorce.
Source: Forbes “Study Shows Divorced Women Have Less Economic Security Than Women Who Stay Married” Nov. 1, 2011