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Women Make Smarter Financial Decisions Than Men After Divorce

People who are divorcing often worry whether they will be able to maintain some semblance of their lifestyle on a single income. This is true even when the divorcing couple is older and there are no minor children to worry about. The cost of living in a metro area like Chicago can be difficult to manage on a single income when a person has gotten used to sharing costs with a spouse.

It’s true that many people struggle financially following divorce. A survey by the American Institute of Certified Public Accountants found that three-fourths of retirement age divorced people need a better understanding of how to manage their finances.

Due to pay discrepancy and other factors, women often are thought to be at a disadvantage economically following divorce, but the survey found otherwise – at least when it comes to making smart financial moves. Women are twice as likely to seek out a job after divorce (40.2 percent compared to 20.6 percent for men) and increase their savings toward retirement (41.3 percent for women, compared to 16.4 percent for men).

Steps To Prepare For Divorce

The CPA financial planners were asked what steps individuals nearing retirement age who are getting divorced can take to be better prepared for a solo life. The top answer (75.6 percent) was learning more about managing personal finances, followed by understanding the long-term financial planning consequences of a divorce settlement (73 percent) and understanding the tax implications of a divorce settlement (56.9 percent).

It helps if both parties in a marriage shared responsibilities for handling finances and investing money, but that is not often the case. The stereotype holds true that men make the majority of financial decisions in longtime marriages.

Whether you are near retirement or just launching a career, it is important to work closely with a lawyer who will help you understand the long-term and short-term consequences of the decisions you make in a divorce. The more assets a couple holds, the more difficult this becomes. Retirement funds, pensions, partnerships and other complex holdings must be factored into the mix. When making a decision about who will represent you in your divorce, make sure the attorney you select has extensive experience in valuing assets and dividing complex financial holdings.

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