From the October 2012 issue of Investment Advisor • Subscribe!

What Divorcing Wives Fear Most

What advisors need to know about older, divorcing women

An alarming fact has surfaced amid the media fascination with aging baby boomers, and it’s not about the number of knee replacements or sales of touring motorcycles: they’re getting divorced.

In 2009, the divorce rate for people in the 50-and-older age group was twice as high as it was in 1990 (10 divorced persons per 1,000 married versus five divorced persons per 1,000 married). By contrast, the overall U.S. divorce rate stayed essentially flat during this 20-year span. AARP has found that among couples aged 40 to 79 who split up, it’s twice as likely to be the wife who initiates the divorce.

The article below is part of a series of articles on this demographic shift, exploring the phenomenon and the role advisors can play.

However unpleasant a marriage may be, it still offers a degree of financial security. Faced with the possibility of leaving that economic shelter, many older women—no matter how wealthy—struggle with bag lady fears, i.e., that they will be left destitute in their old(er) age.

For the less affluent, those fears may be justified. According to an analysis of U.S. Census data:

  • Women’s Social Security benefits, pension and savings tend to be smaller than their exes’ due to lower wages and time out of the work force for child-rearing.
  • More than half (52%) of men who are 65 or older have income from a pension or savings, compared to just 36% of women.
  • Some 57% of older women live alone, while 67% of older men live with a spouse or partner. Couples are more likely to be economically secure than single people.
  • Even among people who are 85 or older, only 17% of women live with a spouse or partner, compared with 60% of men.
  • On average, the income of older men is nearly 75% higher than women’s. 

When you work with a divorcée or a woman contemplating divorce, be aware of these underlying fears and address them as positively as you can. If your client’s post-divorce financial situation looks precarious, brainstorm ideas with her about how to bring in more income, reduce expenses, or join other women in sharing goods and services.

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