Divorcing close to retirement can significantly impact your plans for the future. However, you might not even realize that there may be more on the line for you simply because you are a woman. Women who have gone through a divorce and are over the age of 65 are statistically more likely to have a lower income than their male counterparts.
Median income for divorced women aged 65 and older was tallied at $35,736 in 2016. That same year, median income for divorced men in the same age group reached nearly $38,000. Both these figures trail behind median incomes for married women and men, which were $64,524 and $67,404.
Why do women face added challenges?
There are many reasons that divorced women faced added challenges in retirement, one being the wage gap. On top of the wage gap, women often take time off work to care for children or loved ones. Unfortunately, doing so can impact your earning potential for life.
This is not to say that men do not also face financial challenges after a divorce. The financial stress that women typically deal with typically heightens by comparison. This is especially true considering how many women take on supportive roles to further their husbands’ careers.
What can women do?
One of the first steps is to take account of all marital assets. The court will split up assets during property division, which is an important part of the divorce process. There are several preventive measures that you can take before, during and after property division, including:
- Cancelling any joint accounts
- Retitling assets in your own name
- Updating your account beneficiaries
You might also use this time to reevaluate your budget. Making changes to your budget is not always easy, but it is often essential to creating secure financial footing in the future. Be sure to consider whether things like housing and transportation costs fit in your new budget.
Invest in yourself in your future
Saving money for retirement is often a priority throughout one’s working career. That focus may temporarily shift after a divorce, but it is important to get back on track in as timely a manner as possible. Look for a retirement savings account that will help grow your money, such as a 401(k) account through your job. Employers often offer incentives like matching retirement funds. Limiting risks in your retirement portfolio may also be wise.
Retirement may look different after divorce, but this does not mean that it has to be a bad experience. Indeed, many women successfully enjoy their retirement years despite initially having to divide retirement funds. One of the best ways to aim for this outcome is to familiarize yourself with Minnesota family law.