Surveys conducted by CPA financial advisors show that more than three quarters of retirement age divorcees could improve on the way they handle their finances. There has been a steady increase in divorce rates of couples over 50 since the 90’s, which has led to more adults scrambling to achieve financial security for their retirement years.
Also revealed in these studies was the differences in the way men and women each handle their financial futures in the years immediately following divorce. The study shows that women will not only show better financial planning than men, but they will also have a better grasp on their current financial situation.
This post will discuss some of the reasons women seem better able to handle finances after divorce.
More Women Seek Work After a Divorce
The survey showed that more than 40 percent of women will seek employment after a divorce, even if they had already slipped into early retirement. This is almost double the amount of men, which is approximately 20 percent. Women often see that the quickest solution to financial problems is to increase the amount of income, rather than just adjust expenses downward. And after entering the workforce, women are also more concerned about adding to their long-term savings.
Women Typically Reduce Their Spending
The survey showed that women were four times more likely than their male counterparts to reduce their spending habits after a divorce. By taking a realistic view of what their needs are, many are able to not only make ends meet, but save more money.
Women Save More for Retirement
One survey statistic that shows an even larger gap between the sexes, is the percentage of women who will increase their savings contributions to retirement accounts after a divorce. It shows more than 41 percent of women will add more to their retirement savings, as opposed to 16 percent of the men surveyed.
Women Have a Better Understanding of the Household Finances
With a larger percentage of women managing the day to day household finances, women are more likely to have an accurate figure of what it costs to run the household in its current state, as well as areas where costs can be reduce if necessary.
Women More Often Seek out Financial Advice
When it comes to seeking out financial advice on retirement and other long-term financial decisions, women are 14 times more likely to seek out a third party for advice or assistance in determining their planning needs.
Women Feel the Need to Prove their Independence
A large percentage of married women surveyed, especially those from the baby boomer generation, were in households were the bulk of financial decisions was left to their husbands. When a woman divorces, they often feel the need to assert their new found independence and prove that they are able to manage their financial situation as well or better than their husband had. This can push them to take greater steps to get their financial house in order and secure their future retirement.
Whether it is a drive to assert their financial independence or a way to ensure that their financial house is in order for retirement, women tend to have a better handle on their finances after going through a divorce than men. While no one wants to plan for a divorce, being better prepared financially, by doing things such as updating wills, getting a handle on spending, and putting more money in a retirement fund, can greatly protect your financial future.