How does divorce affect retirement security?

Abstract

The brief's key findings are: (1) While the divorce rate is no longer rising, about 40 percent of marriages still end in divorce. (2) The financial costs can be high: a divorcing couple pays legal fees, may need to sell illiquid assets, and has to cover the costs of two — rather than one — residence. (3) Not surprisingly, the analysis finds that households with a past divorce are much more likely to be at risk for maintaining their standard of living in retirement. (4) Interestingly, for one divorced group — single women — the impact is negligible, perhaps because higher child care costs are offset by retaining the house as an asset.