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How Women Are Financially Affected by Divorce

February 10, 2022

Four Post-Divorce Challenges Women Face

There’s no doubt about it: Divorce is hard on both spouses. However, women are likely to be financially worse off than men once the settlement agreement is signed. Following are four financial challenges divorced women face.

Challenge #1 – Making ends meet

According to a study published by the U.S. Government Accountability Office, women’s household income fell by an average of 41% following a divorce, while men’s household income fell by only 23%.1 And, while progress has been made over the last several decades, husbands today still make an average of 69% more than their wives.2 It doesn’t help that in many cases alimony payments last just a few short years. Add to these statistics the fact that 56% of women report deferring to their spouse on financial planning and investment decisions, so it’s not surprising that many women find themselves financially worse off following a divorce.3

For women who take a break in their careers to care for children, making up that lost income may not be an option. It can be difficult, if not impossible, to rebuild long-term income potential after years out of the workforce.

Challenge #2 – Caring for children

United States Census Bureau statistics reflect that approximately 80% of custodial parents are mothers.4 And while many mothers are grateful to take on the role of primary caregiver, they often sacrifice their long-term earning potential while simultaneously increasing their household expenses in order to do so.

To say that raising children is expensive is a vast understatement, and child support payments often do not cover all the expenses associated with caring for children. Regrettably, only 45.6% of custodial parents who are owed child support actually receive the full amount,5 clarifying that caring for children after divorce is a significant financial challenge for many women.

Challenge #3 – Maintaining the home

One mistake many women make is assuming they will be able to continue to live in the family’s home following the divorce. A couple’s home is often their largest asset, and many times the home must be sold in order to settle finances as part of the divorce.

Women who are able to keep their home following a divorce may soon realize that it wasn’t a smart financial decision to do so. Homes require maintenance and upkeep in addition to the monthly mortgage payment, which can be a significant financial burden over time. Women who keep the family home in a divorce often find themselves in a worse financial position than those who instead invest in low-maintenance assets with the potential to appreciate over time, such as retirement savings accounts and pension funds.

Challenge #4 – Preparing for retirement

In a recent survey of approximately 1,800 women in various stages of the divorce process, 72% did not choose saving for retirement as a main financial concern.6 This is a scary statistic, given that women’s average life expectancy is 81.1 years — five years longer than that of men. Shockingly, the average divorced woman over age 65 had a median annual household income of $35,736, which is nearly $32,000 less per year than married women in the same age group.7

So, where does this leave women? Are they financially doomed when their marriages don’t work out? Not at all. There are many actions you can take to help plan for a comfortable financial future following divorce. You must first remember that all divorce settlements are negotiable. You must also understand that divorce is an incredibly stressful, emotional process, and it can sometimes be difficult to approach decisions like these with a clear head and long-term focus. That’s where a trusted advisor comes in.

At Creative Planning, we serve as your financial advocate before, during and after your divorce. Our experienced professionals can help you make decisions that are in your (and your children’s) long-term best interests during this challenging life transition. If you’d like help navigating your financial life before, during or following a divorce, please schedule a call.


  1. United States Government Accountability Office, “The Nation’s Retirement System,” 2017.
  2. https://www.pewresearch.org/fact-tank/2017/09/20/americans-see-men-as-the-financial-providers-even-as-womens-contributions-grow
  3. https://www.ubs.com/content/dam/WealthManagementAmericas/documents/2018-37666-UBS-Own-Your-Worth-report-R32.pdf
  4. https://legaljobs.io/blog/child-custody-statistics/
  5. https://www.creditcards.com/to-her-credit/surviving-divorce-financially/
  6. https://www.worthy.com/blog/knowledge-center/insights/financial-study-on-divorced-women/
  7. https://www.cnbc.com/2021/09/21/divorce-can-devastate-womens-retirement-savings-how-to-rebuild.html

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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