How Divorce Exacerbates The Retirement Crisis Especially If You Are A Woman

Think Divorce Is Miserable?

Look how bad life can get when divorcees try to retire. Especially when they’re women.

Once upon a time, Monique Prince didn’t worry much about planning for retirement.  True, the southern New Hampshire resident was a stay-at-home mom with three small children. But her husband earned six figures at a corporate job, and he had saved six figures in his 401(k) and individual retirement account.

Then the divorce happened. Prince says her ex-husband got almost all the retirement money. She got the family’s home—which she ultimately had to sell to pay her legal bills. What retirement money she had she ultimately cashed out to “pay off debt and buy groceries,” she told me recently.

Today, Prince, 49, is a clinical social worker—for which she had to return to school, using student loans to fund part of it. Frantic to make up for her losses, she puts $150 a month into her workplace retirement plan. It’s more than she can comfortably afford some months, she says. It’s also nowhere near enough. Her account balance is $5,000.

“Yes, I can work till I’m 70, but that’s only 20 years to try to save up enough money to support myself,” Prince says. “It’s not enough time to get enough money for retirement.”

There’s plenty of blame to go around for the fact that an increasing number of Americans are at risk of running out of money in retirement. Most important is the gradual but seismic switch from workplace pensions to defined-contribution schemes like the 401(k), which put the onus and risk of saving and investing on employees. Age discrimination almost certainly plays a role—people in their 50s who lose their jobs are unemployed for longer periods of time and are often offered jobs paying significantly less than their previous salaries. You can even point to increasing medical costs, which Fidelity Investments says will cost a couple who retired at the age of 65 last year an estimated $245,000, up from a not-exactly measly $190,000 a decade earlier.

One culprit that rarely comes up is divorce. It’s an uncomfortable subject. Mentioning it feels like blaming the victim, though of course no one gets married intending to get divorced. And divorce may actually be less socially accepted than it was a decade ago. Vox recently crunched data from the federal government’s National Survey of Family Growth and documented a significant falloff in the number of people who agreed that “divorce is usually the best solution when a couple can’t seem to work out their marriage problems.” The numbers all but crashed among women with college degrees—in 2002, 42 percent said yes to divorce in those circumstances, and just 31 percent did a decade later.

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