May 16th, 2024 | 3:00PM MST
Written By: Teresa Milner | Senior Wealth Management Advisor with Pearl Capital Management

Do you believe the lifestyle you lived while married is going to continue on after your divorce? How many times have you heard others talk about how unfair their divorce ended up being? It is all too common to hear an individual say, “She took me to the cleaners when we got divorced,” Or, “He just goes on in life as if nothing has changed, but my life has been destroyed.”

Truthfully, divorce does impact your lifestyle and one of the biggest impacts is on your financial health. Divorce poses financial risks to both parties involved. This risk occurs during the divorce as well as after. Unfortunately, oftentimes, it is more difficult for women to afford a divorce and get back on their feet once it has been finalized.

Here are 5 Financial Risks Women Face During and After Divorce:

1. Asset Division
   • • • Often women find themselves at a disadvantage because they contributed less financially during the marriage. This leaves them in the dark and not fully aware of the family’s financial situation. 
       • Unequal division of the marital assets can leave women with fewer resources available for rebuilding their lives after the divorce.
2. Alimony and Child Support
   • • • Both are intended to provide financial assistance to the spouse and children after the divorce.
       • Obtaining fair and adequate support can be challenging.
       • Women are often left with the difficulties of enforcing court-ordered payments.
3. Debt Responsibility
   • • • Not only are marital assets divided in a divorce, but marital debts are too.
       • After divorce, many people will find themselves responsible for debts they did not incur and had very little knowledge of. 
       • Debt management post-divorce is burdensome and affects financial (and emotional) stability.
4. Retirement Planning
   • • • Retirement savings are disrupted as a result of divorce.
       • Many people find themselves starting over with their retirement planning.
       • Many divorces do not fairly divide the pre-tax and post-tax retirement assets. 
5. Loss of Income
   • • • Women are paid only 83 cents for every dollar men earn (a disparity that affects women for the rest of their lives)
         • • • If the woman was not the primary earner in the marriage, she must either re-enter the workforce or upgrade her skills to secure employment.
       • Women are more likely to stop working outside the home to care for children and aging parents.
         • • • This impacts skill development in the workplace and creates a gap in their resume.
             • Contributions to (company-sponsored) retirement accounts are put on hold.
       • Women frequently become the primary caregivers and take custody of the children. 
         • • • All too often, child support and/or alimony are not received.
             • When there is a sick child, she is typically the one who will miss work.

Navigating the financial risks posed during and after your divorce requires careful planning. Professional assistance is available as you work to get your life in order. Seek guidance from various professionals including, but not limited to: legal, financial, emotional, and career. It is essential for women going through divorce to understand their rights, assess their financial situation, and develop a comprehensive plan to secure their future.

This article was written by Teresa Milner, CDFA a Certified Divorce Financial Analyst who specializes in helping women navigate through divorce and into the next financial chapter of life. For more information, email her at CDFA@thepearlcapital.com.

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