OMAHA, Neb.--(BUSINESS WIRE)--According to TD Ameritrade’s latest survey, a large number of married Americans overlook the possibility of divorce or losing a spouse in their financial planning. The unfortunate reality is that approximately four in 10 marriages eventually end in divorce and about a quarter of Americans age 65 and older are widowed.
TD Ameritrade's Financial Challenges of Divorce and Widowhood survey of 2,000 adults ages 37 and older gives insight into the financial lives of the 25 million divorced and 14.5 million widows/widowers in the U.S.
Married people aren’t planning for these possibilities
- Two-thirds of married individuals don’t have a financial plan in place in the event of a divorce or becoming widowed.
- Despite the lack of planning, seven in 10 men (72 percent) and six in 10 women (62 percent) are confident in their abilities to manage their own financial situation in the event of a divorce or a spouse passing away.
- Married individuals report an annual personal income of $61,700 – that’s $13,100 more than widows/widowers and $9,800 more than those who are divorced.
“Advance planning could provide a much needed boost in financial security for those who unexpectedly end up alone at any phase of their lives,” said David Lynch, managing director and head of branches for TD Ameritrade. “Considering divorce or the loss of a spouse is a smart addition to any long-term financial plan. It’s no different than planning for things like a major illness, disability or potential long-term care needs.”
Divorce a harsh, long-term financial reality for many
Compared
to the 43 percent of married Americans who currently feel financially
secure, just a quarter of divorced people say the same. In an average
month, nearly half (47 percent) of divorced individuals are not saving
or investing any of their take-home pay, versus 32 percent for their
married peers.
- Two in five (41 percent) divorcées/divorcés expect to fully retire (versus 47 percent married).
- Just three in 10 divorced Americans expect to be very financially secure in retirement (versus 52 percent married).
- About half of divorced individuals (49 percent) are worried about running out of money in retirement (versus 38 percent married).
Losing a spouse may be less financially damaging than divorce
Nearly
four in 10 widows (39 percent) feel financially secure currently and
slightly more (42 percent) expect to be very financially secure in
retirement, both sharp increases compared to their divorced counterparts.
- However, in an average month, two-thirds (67 percent) of widows/widowers are not saving or investing any of their take-home pay.
- Widowed Americans, on average, expect that 46 percent of their retirement income will come from Social Security while their married peers expect only 29 percent of their retirement income would come from Social Security.
“On average, women may outlive their husbands by five years or more. And though the average age for becoming widowed is 59, it can happen at any time in your married life,” Lynch said. “Married people of all ages should take steps now to ensure they are involved in both big and small family financial matters. They should understand their household assets and liabilities, and ideally, consider establishing multiple income streams that would help them better control their financial futures.”
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Survey conducted by Head Solutions Group
Head Solutions
Group (U.S.) Inc., is a leading market research partner for Financial
Services companies in North America. With offices in New
York, Toronto and Montreal, Head delivers the deep customer insights
that increase institutional knowledge and propel business action. TD
Ameritrade and Head Solutions Group are separate and unaffiliated firms
and are not responsible for each other’s services or policies.
About the Financial Challenges of Divorce & Widowhood Survey
A
20-minute online survey was conducted with 2,019 American adults aged 37
and older by Head Solutions Group, between August 11 and August 14,
2017, on behalf of TD Ameritrade Holding Corporation. Survey
participants included 1,011 married individuals; 496 single, never
married; 308 divorced (margin of error +/- 5.6 percent); and 204 widowed
(margin of error +/- 6.9 percent).The statistical margin of error
for the total sample of N=2,019 within the target group is +/- 2.19
percent. This means that in 19 out of 20 cases, survey results will
differ by no more than 2.19 percentage points in either direction from
what would have been obtained by the opinions of all target group
members in the United States. Sample was drawn from major regions in
proportion to the U.S. Census.
Source: TD Ameritrade Holding Corporation
