On our show we talk about the complex relationships that women have with money. Complex in how we earn it, how we save it, invest it, and spend it… and those relationships can get even more complex when our personal relationships — specifically, our marriages — come to an end.
Statistically, divorce is hard on women’s finances. According to a report from the U.S. Government Accountability Office, women’s household income drops by an average of 41% following a divorce. While there are many reasons for this, a lot of it goes back to women earning less than men to start with, and women not insisting on taking a share of their partner’s retirement accounts in a divorce, which can leave them less prepared for the future. As a result, nearly a third of newly divorced women say they struggle to make ends meet. And with women living an estimated five years longer than men, that dip in income can have serious long-term consequences.
In 2022, 44% of all marriages are expected to end in divorce, but that rate always hovers somewhere between 40% and 50%, depending on the year. We’re also seeing that the rates of “gray divorce,” are now higher than they’ve ever been. Since 1990, we’ve seen a doubling in the rate of divorce for people over 50, and a tripling of divorce rates for those 65 and older.
Divorce is something that is never easy, even when it’s something we want — and according to a Stanford University study, women actually initiate 69% of all divorces — but still, it’s never something we’d choose to go through.
If you’re going through a divorce or separation, or think you might, today we’re giving you a guide for what may lie ahead — and we’re getting tactical about some of the moves you should be taking to set yourself up for success, and have the financial freedom you deserve in the years to come. We’re doing it all with Kimberlee Davis, the Managing Director and Partner at The Bahnsen Group, a bi-coastal wealth management firm. She’s a Certified Divorce Financial Analyst focusing on helping women transition to financial independence after life-altering events such as death or divorce. She is also the author of book, ”The Fiscal Feminist: A Financial Wake-up Call For Women,”
Listen in as Kimberlee talks about her own divorce — she didn’t do any pre-marital or post-marital planning, and she let her husband control the household’s finances. We talk about what it really takes to be financially strategic, preventative and knowledgeable,” and how you can get there by asking the right questions.
We discuss the professionals every woman needs on their team and why (like a financial advisor, a divorce attorney, an accountant, and more.) and the benefits of bringing these people to our side during our time of need. We also talk about how to split finances. (I think we all know people who have made different arrangements, wherein the husband keeps the business, but the wife keeps the house, or the wife keeps the house, but the husband keeps the pension… so, what’s the right move?) No, there’s no one-size-fits-all answer, but Kimberlee weighs in on how to think about things, going in.
Kimberly also gets real about what needs to happen with your accounts— should you be opening new checking, savings and credit accounts in your name only, and closing any that are held jointly? And we dive into what to consider with your credit report, with retirement accounts (IRAs, 401(k)s and pensions, etc.) and with joint debt and assets.
In Mailbag, we advise a listener on buying and selling a home in the era of climate change, and we talk through the advantages and disadvantages of getting married where college aid is considered. And in Thrive, how to talk to your manager about getting a raise.
This podcast is proudly supported by Edelman Financial Engines. Let our modern wealth management advice raise your financial potential. Get the full story at EdelmanFinancialEngines.com. Sponsored by Edelman Financial Engines – Modern wealth planning. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor. Results are not guaranteed. AM1969416