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Almost six in ten women say that divorce was a financial wake-up call for them, according to a new study.1 However, the good news is that after divorce many women take control of their finances and, as they gain greater knowledge and assemble a prudent financial plan, achieve greater financial confidence and security.
It is no secret that divorce can bring on financial hardship. But almost half (46%) of women say divorce brought with it financial “surprises,” including the size of marital debt, receiving less child support or alimony than expected, or simply the sheer cost of getting a divorce.2 The average cost of divorce is about $15,000 per person, including attorneys' fees, court costs, and the cost of outside experts like a tax adviser, child custody evaluator, or real estate appraiser.3
In fact, the impact of divorce can be financially devastating. According to the US Census, women who divorced in the past year are twice as likely as recently divorced men to be living in poverty (22% vs 11%).4
Moreover, when it comes to long-term financial planning, many women say they are starting almost from scratch. One in five (22%) divorced women say they had relinquished all responsibility for managing the couple’s long-term finances.2
However, although women may face significant hardship when first getting divorced, many work to acquire the knowledge and skills they need to get financially on track. Compared to recently divorced women, those who have been divorce for 10+ are significantly more likely to say they have a good understanding of financial products, set and achieve financial goals, and are good at saving for long-term goals like retirement.
I have a good understanding of the financial products I own
I set financial goals for myself and usually achieve them
I'm good at saving for long-term goals like retirement
Divorced 10+ years
Divorced <10 years
Source: Allianz Life, 2019 Women, Money and Power Study
Moreover, as a whole, divorced women are becoming increasingly financially empowered. Growing numbers of divorced women say they are more financially secure (65% in 2019 versus 50% in 2016), and nearly half (49%) of all divorced women say they have more earning power than ever before, up from 39% in 2016.1
The important lesson is that although unexpected life events such as divorce can derail financial plans, acquiring the right financial knowledge and smart planning can help set a course to financial recovery and even greater financial empowerment and security.
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Navigating the financial challenges of divorce
Financial strategies to recover from unexpected life events
Financial strategies for women
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1. Allianz Life, 2019 Women, Money and Power Study
2. Forbes, "The 6 Nasty Financial Surprises For Divorcing Women," July 2018
3. The Street, "How Much Does a Divorce Cost on Average in 2019?", March 2019
4. US Census, Marriage and Divorce
This publication is designed to provide general information and is for discussion purposes only. The effectiveness of any strategy is dependent upon each individual’s facts and circumstances. This article does not provide legal, tax or account advice. Because of the possibility of human or mechanical error, the accuracy, adequacy, completeness or availability of any information is not guaranteed.