As people are living longer, planning for late-life financial security has been a topic that is growing in popularity. The cost of living is up in comparison to years past, and being able to sustain oneself during retirement years is the goal. But what about when a divorce, especially a divorce that occurs later in life, occurs and divides your assets? In these scenarios, it is crucial for the divorcing spouses to acknowledge the financial hurdles they may face later in life and to plan accordingly.
How alimony fits into all this is simple. Alimony is when one spouse, who makes a majority of the income in lieu of the other spouse’s sacrifice, owes a set financial payment to that spouse, per the divorce decree. Not every spouse is awarded alimony, but it is especially important for women to consider if they are mitigating a late-life divorce. This is because The National Institute on Retirement Security, a non-profit research center, reports that women are 80 percent more likely than men to be impoverished at age 65 and older. Women age 75 to 79 are three times more likely than men to be impoverished at that age.
According to the report, this is due to a variety of factors, including the pay gap, being a single parent, going through a divorce and the simple fact that women statistically live longer than men. The pay gap has been reported as being approximately 75 percent to 80 percent of the pay that men receive for working in the same position. For these reasons, women may need to consider seeking alimony from their husband during divorce proceedings.
Receiving alimony could completely change the game for a women facing a late-life divorce. It could mean the difference between living paycheck to paycheck or even depending on Social Security alone. There are many ways to sustain healthy finances after a late-life divorce. Seeking alimony is just one of those ways.
Source: abqjounal.com, “Women more likely than men to face poverty during retirement,” Adam Allington, July 10, 2016