The Impact Divorce is Having on Retirement
Baby boomers have been far and away the generation with the highest rates of divorce over the past several decades. Now, as they reach retirement age, they are setting new records for divorces we’ve seen for people over 60, and it is having drastic effects on their ability to achieve their retirement goals.
While divorces earlier in life tend not to have significant impacts on individual finances in the long run, divorces later in life can devastate retirement plans. New studies from economists at Boston College and Mathematica Policy Research indicate that women often suffer the consequences more acutely than men.
The study used data from a survey of more than 56,000 women. Researchers found that women who divorced in their 50s were 10 percentage points more likely than women who divorced before age 30 to be working full-time jobs between the ages of 50 and 74. Additionally, women who were born in the early 1950s were 19 percentage points more likely to be working full-time after age 50 than women who were born in the 1920s.
Consequences for older adults
Due to these changing dynamics, divorced people are much more likely to be poor (or at least experience financial struggles) in their 60s and beyond. Per studies from the National Center for Family and Marriage Research, the poverty rate is extremely low for married Americans over 62 who were never divorced, whereas 16 percent of single people who divorced before age 50 were poor. Nearly 20 percent of single people who divorced after age 50 were poor.
Clearly, people who go through divorces later in life must be careful about how it will impact their long-term financial goals. For further guidance and advice, meet with a skilled Long Island divorce attorney at Bryan L. Salamone & Associates.