Three-quarters of retirement-age divorcees lack a good understanding of how to manage their personal finances, according to a survey of CPA planners released Thursday by the American Institute of CPAs.
The divorce rate for Americans 50 and older has doubled since 1990, and more and more people nearing retirement will find themselves scrambling to get on solid financial footing.
CPA planners in the survey noted sharp differences in how divorced men and women approached their finances as they prepared for retirement.
Twenty-six percent of female clients and 25% of male clients were likely to experience a deterioration of their spending habits following divorce. However, female clients were much likelier than male clients to adopt positive financial behaviors after divorce.
Forty percent of women were likely to look for a job, compared with 21% of men, and 41% of women to increase their saving toward retirement, versus 16% of men.
Not only that, women were seen as nearly four times more likely than men to improve their spending habits and roughly 14 times likelier to actively seek out financial advice after divorce.
“When couples get divorced later in life, there is often one partner in the relationship who handled all of the finances — in my experience, it’s usually the husband, particularly in boomer-age couples,” Tracy Stewart, member of the AICPA’s personal financial planning executive committee, said in a statement.
“In many instances, this leads to one person in the relationship not having an accurate picture of the family finances, including their retirement savings. It is essential that couples who get divorced later in life take a long view when dividing assets and making financial decisions.”
The report was based on an online survey the AICPA administered last February to members of the AICPA personal financial planning section, and to which 548 CPAs submitted completed responses.