By Mary Helen Gillespie
It’s not a fairy tale: Data repeatedly shows divorced women suffer greater financial losses in their retirement years than married or single women. Retirement Daily, as part of a year-long investigation, reached out to ask female readers to share their divorce and retirement stories first-hand. The responses were overwhelmingly emotional.
For those who shared their story, we asked a certified divorce financial analyst (CDFA®) to provide expert guidance for women going through similar circumstances, and to offer suggestions for the woman’s current personal-finance status either during or close to retirement.
“Deborah,” age 66, has been divorced for 14 years and currently lives alone in the greater Boston area. She is a domestic violence survivor whose divorce attorney ignored most of her retirement concerns as well as the multiple accounts of her ex-husband’s attacks with the intent to maim or kill her.
How has your divorce financially impacted your retirement plans?
I am an “elder orphan” sans spouse, children, or other relatives to support my silver journey, as well as a survivor of alcohol-fueled domestic violence. The 2008 divorce destroyed my 401(k) savings and other accounts. The ensuing recession left a devastating crater in my income and savings as I was also laid off from a corporate risk management role at a top 10 U.S. bank due to the banking crisis that accompanied the recession.
I took early Social Security at 63 to provide a stable revenue flow. I am currently receiving half of my ex-husband's pension from a QDRO (qualified domestic relations order) and my own small pension plus part-time work that proves to be variable. I signed a lucrative and fair contract for strategic communications management with one client this year, only for her to announce three days later she was reneging on it, and cut my fee by two-thirds. Sweet, eh? Age discrimination is also rampant in this field, and I don’t derive any comfort that 40 is the new cut-off point for alleged proven talent. I have worked a multitude of part-time jobs from teaching at universities to hawking fragrances at department stores. My LinkedIn profile describes me as a side-hustle queen.
Did you hire a financial advisor, a CPA, CDFA, or other finance professional to help you plan your retirement needs during the divorce proceedings? Would you today?
No. My ex-husband refused to hire a financial professional during the marriage, saying he would manage the investments. Given my financial background, I kept my own 401(k) and other accounts separate. I regret not hiring a professional both pre- and during the divorce proceedings.
Was your divorce attorney concerned about your retirement finances? Was the divorce judge?
Neither gave a damn. My politically-connected attorney focused on his $30,000 fee -- some of which I had to borrow from my parents.
Some background: As the verbal and physical abuse escalated, I finally took out a criminal injunction barring my ex-husband from the house and hired the attorney who was certainly a legal advocate but not a financial one. As the financial lies and half-truths unrolled through the divorce proceedings, my attorney told me "Just let it go."
My income was significantly higher than my ex-husband’s for the last 15 years of the 22-year marriage. At the time of the divorce, he had not worked in nearly two years. He refused. And unbeknownst to me, was taking higher and higher amounts of home equity amounts to cover the bills.
He had no income. No savings. After he was barred from the house, he was living off secret cash handouts from his elderly mother and lived in a rented bedroom in the inner city.
Our house had to be sold. He refused to clean, pack and get it ready to show potential buyers. The house itself needed a few touches here and there but was in excellent shape in a good neighborhood in a desirable suburb.
He also refused to rid the cellar of the man-cave hoard he had been making for years, despite repeated requests to clean out at least some of it.
The dozens and dozens of empty 50-pound bags of dog food and bird seed were sacrosanct. Ditto the massive model train set-up covered with at least 12 years of dust. His office was a computer on an old typing table surrounded by empty Scotch bottles but no lamps. Piles of putrid, raggedy clothing abound. Quite simply, it was impossible to walk through the waist-high debris. There were also rusted tools, solvents, paint cans and other toxic debris piled over six-feet high.
So, I had to use my savings, my retirement portfolio and 401(k)s to pay for the cleaning teams, the dumpsters, the painters and the handymen. Plus, the landscaping. A one-time thriving horticulturist, he had not cut, raked, weeded or watered our two acres or cleaned the in-ground pool in two years. Curb appeal? The Addams Family sported more flair.
The cellar alone cost $15,000 to clean. Yet each time I brought these escalating costs to my attorney, the answer was the same: Just let it go.
I did not fight for financial reimbursement, either short- or long-term. I was covering the mortgage, taxes and the cost to put the house on the market.
My ex paid nothing while I emptied my retirement accounts. The house sold within three days on the market. I took the first offer that came in, concerned that the recession would sink the price if I waited.
In the end, the profit from the sale was a mere $7,000 because of his secret home equity loans and had to be split equally between the two of us.
My ex was fully employed within a year of the divorce.
By 2010 I had to file for bankruptcy.
How would you describe the quality of your financial life post-divorce?
I am blessed to be living in a relatively new 62-and-over income-based apartment complex. Heat, electricity, water, snow plowing and trash are included in the rent. But my retirement dreams of European travel have evaporated, as has spending several weeks every winter somewhere warm away from the brittle New England temperatures that freeze my multiple arthritic joints.
I also came to the painful realization that I can’t afford a dog. This is probably the most hurtful issue. As a former fur-mama with 40 years of canine companions of all breeds, my heart breaks when I see that the local shelters are back to capacity and I am not able to re-home a lonely, lovely pooch. Veterinarians don’t take Medicare. I do pet sit on occasion and am considering becoming certified to expand into roles available domestically and abroad.
I work as much as I can, given severe arthritis. Am starting to explore free/reduced college courses for seniors; would love to study art history, theater, and revive my once-fluent high-school and college Spanish.
What other information would you like to share with women in similar situations?
First, be physically and emotionally safe. You have the courage to leave, and there are many, many free resources available to help you. If you have children, and yes, even pets, they also need to be away from the abuser. As you plan your exit, ask a trusted ally to set up an account in their name with you as a beneficiary.
Seek mental-health therapy. (I still am in care for acute PTSD from the multiple assaults over the years, including one of the last attacks when he struggled to throw me over a bridge on I95 in Maine onto a frozen river. He was speeding during a blizzard and I asked him to slow down. I am grateful that over time, and with a great deal of help, the acute symptoms have receded.) Find support groups to connect with women with whom you can share your journey. They will be your sister, your mother, your daughter, and your strength to fight for the financial support and retirement security you deserve.
Definitely seek out a CDFA to advocate for you, and your children if applicable. Make sure your attorney understands the financial aspects the divorce will have on your future. If necessary, fire him or her and find one who will listen to you and advocate for you.
You, my dear, are worth every penny.
Retirement Daily shared Deborah’s story with Bonnie A. Sewell, CFP®, CDFA®, AIF®, CEPA®. Bonnie is managing director and senior wealth advisor at Dakota Wealth Management in Leesburg, Virginia. Here are her expert thoughts.
What advice would you give to other women currently facing the same challenges this individual faced to improve their divorce outcome (financial or otherwise)?
In the United States, you do not need to use an attorney to divorce. You should pay for a consultation to understand your legal rights, then engage a divorce financial professional to model what you both own, owe, and earn. If you are divorcing a bad actor who will not negotiate transparently, you do in fact need an attorney to employ expensive tools, i.e., discovery, subpoenas, to get correct, complete and current information. Refuse to engage in negotiations until you have what you both own, owe and earn (the facts of the marriage) in your possession. Stay physically safe.
Do you have any advice for Deborah that she could implement now given her outcome?
While I can’t say that Deborah should have done anything different, I may have suggested a part-time job equal to the amount Social Security was paying for a few years to increase that permanent life-long benefit.
Do you recommend she go back to court to change the settlement?
It depends. Most courtrooms are the Wild, Wild West in terms of understanding likely outcomes. Review tapes of Johnny Depp vs. Amber Heard on YouTube.com to see what I mean. And it is expensive. Those who experience court describe it as soul-stealing, demeaning, and frustrating.
This is like two forks in the road. If you believe you can get a reasonable outcome in court, you may wish to pursue this. It does keep you in the past, however. The other fork is to grieve over the indignity and unfairness of it all and truly move on. We say the best revenge is creating a life you love filled with love. This is because if you really want to be free of the other person and all they represent, you must create a life that leaves no room for them to take up space in your head or heart.
What could Deborah do to increase her income post-divorce, especially in retirement?
We live in a world where many seniors find their stride. Go to your library or consult the gospel of Google and look up stories of folks who made their money and their legacy after age 60. I hope they inspire you as much as they do me. There are many programs available for the first-time entrepreneur and in some locations, seniors are paid a premium because they bring wisdom and good work habits to a job. Deborah had a good career in her marriage. Leverage that experience into her current life.
What is the one area of advice you ALWAYS give your divorcing clients regardless of wealth?
We have but one life here and none of us has a contract with the future. You have complete responsibility for your life now. That is a blessing and a challenge. Meet the challenge. If you cannot think how to do it, mirror those that have, until you find your unique path.
You can watch our webinar, Retirement Roundtable: Women, Divorce & Retirement, with Robert Powell and panelists Michelle Petrowski and Bonnie Sewell.
To find a financial professional with experience in divorce, visit the Institute for Divorce Financial Analysts website.