Three-quarters of retirement age divorced people need to have a better understanding of how to manage their finances, but women are doing a better job than men, according to a new survey of CPA financial planners.
The survey, by the American Institute of CPAs, found the planners’ female clients are much more likely to exhibit positive financial behaviors after a divorce than their male clients are. Women are twice as likely to seek out a job (40.2 percent for women, 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).
Women were found to be nearly four times more likely than men to improve their spending habits (42.3 percent for women, compared to 11.7 percent for men) and approximately 14 times more likely than men to actively seek out financial advice after divorce (60.4 percent for women, compared to 4.4 percent for men).
“When couples get divorced later in life, there is often one partner in the relationship who handled all of the finances,” said AICPA Personal Financial Planning Executive Committee member Tracy Stewart in a statement. “In my experience, it’s usually the husband particularly in Boomer-age couples. In many instances, this leads to one person in the relationship not having an accurate picture of the family finances, including their retirement savings. It is essential that couples who get divorced later in life take a long view when dividing assets and making financial decisions.”
There were some similarities among the genders, according to the poll. The survey found men and women are equally as likely to experience a deterioration of their spending habits after a divorce (25.7 percent for women, compared to 24.9 percent for men).
CPA financial planners also were asked about the financial steps that clients near retirement age could take to better prepare them for divorce. The most frequently cited steps were understanding how to manage their personal finances (75.6 percent), understanding the long-term financial planning consequences of a divorce settlement (73.0 percent) and understanding the tax implications of a divorce settlement (56.9 percent).
The extra steps CPA financial planners believe would have better prepared their clients for divorce are updating wills or trusts (51.2 percent), increasing saving for retirement (50.7 percent) and decreasing spending (42.8 percent). Approximately one-third of CPA financial planners (36.1 percent) said establishing a pre-nuptial agreement is a step that would better prepare their clients financially for a divorce.
Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.