Are Women Worse Off In Retirement After Divorce?

Earlier this year, Congresswoman Carolyn Maloney of the U.S. Joint Economic Committee released a stunning report about the gender pay gap and the long-term effects it can have on women. It also addressed how lesser pay over a long term slashes the retirement prospects for women, an effect that has drastic implications for divorcing women.

According to the report, over the course of a woman’s career, she can expect to make a little over $10,000 less than a man in the same role per year. Over a lifetime, that amount can reach a staggering half million. Not just that, but the report noted that women tend to leave jobs more frequently than men, making them less able to set up pensions (33 percent of women have pensions, compared to 55 percent of men). Women also generally have lower salaries.

Not only that, but because women often bear the brunt of taking care of the immediate needs of their families, they often invest less in their retirement accounts than men do. As a result, women often have less money than men during retirement ”“ and if divorce happens, this can be detrimental to womens’ prospects for the futures.

The Effect of Divorce on Women and Retirement

Because women are less able to plan for retirement than men, in addition to the expenses of filing for divorce, attorney fees and the disputes that go on during property division, divorcing women are typically disadvantaged in divorce. In fact, divorced women actually have some of the highest poverty levels among women ”“ even widows are generally at less risk of poverty than divorcing women. Only women who never marry have worse poverty levels.

So, how can women prepare for retirement and divorce in light of the overwhelming pressures they face? Women should be aware of how their divorce settlements will affect retirement accounts for both themselves and their spouses. Consider the future values of assets during the process of marital asset division, not just the current values. Many divorcing couples are interested in the here and now ”“ who gets the house, who gets the cars, who gets the boats. But often, retirement accounts (due to their tax-free growth) are much more valuable in the long term than other property. Trading some assets away during the divorce may be a worthwhile exchange for a portion of a spouse’s retirement fund.

Our Denver family law firm can assist your family in property division to ensure that both parties receive an equitable, future-proof portion of your marital assets.

What Does The Census Says About Divorced Women? Know Your Finances

According to data from the most recent census, women are shown to be disproportionately affected by divorce when it comes to finance. Compared to men, women tend to earn less money and tend to be less likely to be able to afford to live independently. Why is being single so expensive?

There’s the obvious answer ”“ two incomes are better than one. But it’s more than just income. Here are some reasons why being single is just more expensive ”“ and why women often face harsher prospects of independence.

  • Taxes: Married couples can typically save thousands of dollars in taxes when they file jointly. This is because of the bevy of federal and state laws that benefit married couples. When you get a divorce, you lose these benefits, which means your taxes will probably be higher. Additionally, studies from and the University of Central Florida reveal a hidden “woman tax” when it comes to sales. Products marketed to women, even if they are functionally identical to men’s products, are more expensive on average.
  • Health Spending: Did you know that, on average, single women spend more on annual healthcare than single men? The Bureau of Labor Statistics (BLS) reports that while men spend 3.9 percent of their annual income on health care, single women spend 7.9 percent, just over double of what men pay. The National Women’s Law Center says that a nonsmoking woman often pays more for health insurance than a smoking man. Women also have to worry about gynecological costs as well as pregnancy, two things that men do not have an equivalent of. Furthermore, women just go to the doctor more, according to a Louis Harris and Associates study that found that men avoid doctors at three times the rate of women yearly, and that a third of men don’t even have a regular physician.
  • Housing: According to the BLS, single women are ”“ once again ”“ paying disproportionate amounts for housing compared to couples and single men. Couples spend an average 23.9 percent of annual income on housing. Single men, 30.3 percent. Single women, 39.8 percent. It breaks down logically; couples can combine income, single men tend to make more money and single women are victims of the wage gap, thus the higher percentage.

It’s definitely not fair and shows bias against not just singles, but specifically single women, at an institutional level. For these reasons (and several more), it’s just harder to be financially independent as a single woman.