Why Women Over Fifty Must Mind the ‘Divorce Gap’

Divorce is difficult for many reasons and it’s a life transition that impacts many women. In addition to the obvious emotional challenges and logistical changes involved in disentangling your life from your former spouse, there are serious financial considerations, too. In this article, I will focus on the economic consequences that often impact women more significantly than men. Unfortunately, women can face a troubling loss of both income and retirement savings, especially when divorce happens after age 50, and it’s important to be aware of this so-called “divorce gap” if your marriage ends.

Below, I’ll share more details about the divorce gap, plus what you can do about it if you find yourself exiting a marriage at fifty or beyond.

The ‘Divorce Gap’ By the Numbers

Data shows that the divorce rate for couples over fifty is growing, even while divorce rates for younger couples have declined. What’s more, the Government Accountability Office (GAO) shares some startling statistics for these divorcing women. In particular, research shows that women over fifty are likely to see their incomes drop by an average of 41% post-divorce. The number is much lower for men, who experience an average drop of 23%.

So, not only are more women facing divorce in their later years but their financial security is disproportionately impacted. Oftentimes, a woman will see her retirement accounts cut in half, which can feel devastating and create fear and anxiety about the future.

Even if a woman is still working, America’s persistent wage gap compounds the divorce gap because many women are earning less than their male counterparts. This means they have smaller pensions, and likely less money saved in 401(k), 403(b), and IRA accounts. These smaller balances become even more concerning when you take into account that women, on average, live longer than men.

Each of these statistics is concerning, but taken together it’s clear that the divorce gap is a huge hurdle for women divorcing in their later years.

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Inequalities Between Married and Divorced Women

Another result of the divorce gap is the financial chasm between married women and divorced women. In March of 2020, pre-pandemic, the Retirement Confidence Survey showed that 76% of married women felt very confident or somewhat confident about having enough money to live comfortably in retirement. By contrast, only 43% of divorced women expressed confidence.

Of course, the pandemic caused stock market volatility and losses for many people. Women over age 50 have shorter time horizons and may not be able to recoup their losses, making it likely that a greater percentage of divorced women feel financially vulnerable now than they did at the time of the survey.

There is a ‘Knowledge Gap’ at Play Also

Something that the Retirement Confidence Survey exposed is that there is a lack of financial knowledge impacting divorced women, too. Not only did the survey show that divorced women workers have the lowest confidence in their retirement plans, but they also lacked knowledge about how to better secure their financial futures. For instance, fewer than half of the divorced women surveyed could pinpoint how much they need to save to live comfortably in retirement.

What’s a Divorcing Woman Over 50 To Do?

There are two very helpful steps that you can take to close the divorce gap if you find yourself headed for divorce, especially after age 50. First, it’s ideal to work with a Certified Divorce Financial Analyst™ – a professional who can offer education and guidance about your unique financial situation post-divorce. Working alongside a professional with expertise in divorce and finance is a smart way to plan for handling everyday money issues as well as retirement planning. Second, it’s smart to hire a lawyer who is experienced in handling divorce cases for women in the state where your paperwork has been filed. A seasoned attorney can help close the divorce gap by working to secure a settlement agreement that is financially advantageous.

Be selective about choosing the professionals you work with if you find yourself divorcing over age 50 because errors could be costly. The divorce gap is very real, and it necessitates careful planning to move forward on firm financial footing.

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Final Thoughts

Divorce happens – more often these days for women over age 50 – and it has very real financial repercussions. To overcome the divorce gap and move forward with financial confidence, it is imperative that you advocate for yourself and that you find professionals willing to advocate for you.

If there is one thing I recommend to all women, regardless of marital status, it is to lean into financial education. It’s a proactive step you can take to protect your financial future because none of us can predict the curveballs life may throw our way. The more you know, the better prepared you’ll be to weather storms that impact your finances.

For more content on divorce and finances, you may find value in Episode 58 of my Flourish Financially podcast, Bouncing Back from Divorce, Emotionally and Financially.