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How divorce can affect retirement

El Paso couples over the age of 50 who are ending their marriages may face a greater risk of poverty than people who have never been divorced. One study found that almost 20 percent of people who divorced after the age of 50 lived in poverty after the age of 62 compared to less than 4 percent of never-divorced people.

Some of the reasons for poverty include lower Social Security payments for single people, having to pay costs such as electricity and rent that were previously shared, and a tendency for women with children to exchange their share of retirement assets for the home. Financial planners advise against the latter because of the impact it has on a person's ability to save for retirement.

Remarriage causes poverty rates to align more with that of people who have not divorced, and the poverty rate of remarried people is 3.3 percent. However, subsequent marriages after the first are more likely to end in divorce.

It is believed that the financial impact of divorce is a significant factor in pushing people of retirement age into the workforce. Another study found that women who are in their 50s when they divorced are more likely to be working full time between the ages of 50 and 74 than women who divorced in their 20s.

Divorce can have a serious financial impact at any age. During the process, people may be caught up in concerns about child custody and their own emotions, but it is also important to try to safeguard their financial security. Estranged couples may want to have the assistance of their respective attorneys when sorting through these matters.

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Kubinski & Nichols, P.C.
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El Paso, TX 79935

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