Crucial Financial Advice for Women Divorcing

Financial Advice for Women Divorcing

As much as we would like to think that women and men are always treated equally, your sex tends to impact how you experience divorce.  For women, especially who are homemakers or stay at home moms, they typically face more trouble financially than men during divorce.

Here is some financial advice for women divorcing.  

Women tend to fare worse in divorce

The Atlantic has documented, divorced women tend to do worse than divorced men.  This is especially true for working women. Women who worked before, during or after their marriages average a 20% decline in income at divorce, while men’s income averages a 30% increase.  

The biggest reason is that women are more likely to put their career in the backseat during the marriage.  As a result, women are more likely to struggle financially.

The good news is, this was way worse decades ago when women were unlikely to work outside the home.  That does not change the fact that women have special concerns to address during a divorce that men might not have to think about.  

Do not lose sight on retirement

All the money that either spouse earned during the marriage generally must be split up at divorce, and it is generally split up evenly.  

If your husband made more than you, it is important to understand that the law assumes you helped him earn that money so you have a legal right to some of it, usually about half.  

This basic principle can get lost when thinking about retirement assets.

Retirement assets tend to be far from a person’s mind as something to deal with in the future.  They are also generally in one person’s name.

Regardless, you should not forget they are an asset that should be split.  For example, your husband may have earned pension benefits that will ensure a stream of income to him when he retires.  You may be tempted to ignore that pension in the divorce, but you should not. You helped him earn that pension, and you are entitled to share it.  

The future earnings from the pension can be given an estimated present value and then split.  

Do not lose sight on retirement

Be careful about limiting your options

Decades ago, a divorcing husband would be forced to pay alimony (also known as spousal support) to his ex-wife until she could become self-supporting.  That generally meant that the husband’s support payments were stopped when the wife got remarried.  

Sometimes alimony stopped if she got a job.  The problem was that women would sometimes be afraid to remarry or find work because it could hurt their income.  

Today, women are probably better off avoiding such arrangements when possible.  Some things, like child support, will fluctuate with relative income, though.

Get your own accounts and your own credit

Even with changing gender norms, today 69% of men earn more than their wives or partners.  As a result, women are more likely to have credit cards, mortgages, and other accounts that relied on their husband’s earnings.  

You may be restricted from making any changes until the divorce is finalized. But, as soon as you can you should begin closing all your joint accounts and reopening separate accounts that will give you access to your assets and help you build your own credit.

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