In Texas and across the nation, women have made great strides in being treated on equal footing with men in the workplace. However, in many instances, there remains an inherent disparity between how much people earn and it is frequently based on gender. For women, finances are a prominent concern during a divorce. This is true even for women who earn a good living in a professional field. If it is a woman who works a midlevel job or is a stay at home parent, it can be difficult to fully prepare for the future with adequate retirement savings. This can and should be addressed as the divorce proceeds.
Strategies to ensure retirement savings are sufficient after a divorce
Based on 2016 statistics from the Center for Retirement Research at Boston College, women over 65 who were divorced or separated were found to have less than men in median household income by around $2,250. Experts believe this is largely due to women taking time away from work to focus on their family whether that is raising children or other family matters. It contributes to the reduction in income and assets as they age when they might need it for retirement after a marriage has ended. Since divorce can be so financially problematic for women, it is crucial to prepare before and during the divorce.
Texas is an equitable distribution state meaning that property will be distributed in a way the court deems fair. That does not necessarily mean it will be split in half. As the divorce moves forward, assets must be scrutinized and accounts should be updated. For example, if there is a joint bank account, it should be split before the divorce. When there are retirement accounts with beneficiaries listed, it should be updated. Failure to do so could cause problems when the person tries to access the funds in the account.
Women who were homemakers while the husband worked can expect spousal maintenance, but how much will be paid can vary and it still leaves the woman reliant on the ex-spouse. For women who work, it might be wise to start looking for higher paying employment. Often, the maintenance award is based on helping the receiving spouse get education and training to improve their station and earn on their own. At work, simply putting a paycheck in the bank will not help it grow. Retirement accounts like a 401(k) are useful in that it can grow significantly with employers matching funds.
Thinking about the financial future is imperative during a divorce
With divorce, finances might take a backseat to child-related issues. This is understandable, but it should not supersede the importance of thinking about how property will be divided, how the lesser-earning spouse will make ends meet and what the future will hold. Being fully protected includes having a full accounting of the assets including a family home, automobiles, collectibles, items of sentimental value, bank accounts, investments and more. This is critical for women who might have earned less and need to think about their present and future financial needs. Not every case is contentious. Some can be negotiated effectively and fairly, but it is essential for people to know what to ask for. If it needs to go to court, a primary factor in a positive outcome is effective representation. From the beginning, it is wise to have experienced guidance to be fully prepared and know what steps to take.
