Another Way to Maintain Wealth: Stay Married

Not too long ago, an older friend of mine got divorced. In doing so, she lost a major share of the wealth she and her ex-husband accumulated during their marriage. But, since the monies amassed were so considerable, even with a settlement of 10% of joint money, she was by most standards affluent. For her, the loss of shared assets and income was a small price to pay to separate herself from a man who had been difficult and punitive. She wanted out and was willing to sacrifice for it. Her freedom meant more than the money.

Sadly, few aging women who get divorced are as fortunate financially. According to I-Fen Lin, Susan Brown and Anna Hammersmith, co-authors of the study Marital Biography, Social Security and Poverty, “Gray divorced …women face considerable economic insecurity. Their Social Security benefits are relatively low and their poverty rates are quite high (over 25%), indicating Social Security alone is not sufficient to prevent these women from falling into poverty.”

This statistic is alarming since the divorce rate of couples over fifty is increasing. The same researchers found that break ups among this older age group has increased by two times since 1990 though the overall divorce rate in America remained stable. Those who had been married more than once or were less educated or whose economic resources were scarce were most affected.

Among these older divorced individuals, the men are almost 70% less likely to live in poverty than the women. This means that graying women who divorce need to determine ahead of time how a divorce would impact them economically. One way to do this is to seek the help of a financial adviser as well as an attorney. The problem here for couples with few assets and little income, of course, is that they don’t need an advisor as much as those with greater resources. If this is the case, a wife may have to ask herself, “Is staying married something I can tolerate for economic reasons?”

I do know a couple who essentially despise each other, but do remain in the same household for financial reasons. They cannot afford two residences. This is not a physically abusive relationship, but some would say emotionally destructive on the part of both husband and wife. This couple has managed to separate space in their shared house so that they run into each other as little as possible. It evidently is tolerable and provides a better standard of living than either could have after a divorce.

Re-marriage could soften the financial blow to women who divorced after fifty. According to the Pew Research Center 63% of women 55-64 who were previously married (though not necessarily divorced after 50) remarried in 2013. The comparable figure for men was 71%. For those 65 and older, the remarriage number was less, 40% for women and 66% for men. Keep in mind that this data includes widows and widowers who may have a better chance of remarrying than divorced individuals.

The take-away from this brief introduction to the subject is to think carefully before divorcing. This is especially true for women who are more likely to come out on the short end of the stick

For More:

Divorce Over Fifty (The Huffington Post)

Dealing with Divorce (Ameriprise Financial)