Understanding the significant financial impact of losing a spouse/partner via divorce or widowhoodNew research from the Allianz Life ‘Women, Money, and Power Study’ acknowledges roadblocks to financial security.
MINNEAPOLIS, May 18, 2017 – Although more women are taking the reins of their household finances, divorce and widowhood remain significant roadblocks to achieving true financial security, according to the newly updated Allianz Women, Money, and Power® Study* from Allianz Life Insurance Company of North America (Allianz Life®).
More than six in 10 (64%) divorced respondents said their divorce created a financial crisis for them and nearly an equal amount (59%) noted that losing their spouse/significant other due to divorce was a real “wake-up call” for them from a financial standpoint.
Key Findings Snapshot:
- 64% of divorced women report their divorce created a financial crisis
- 59% of divorced women noted their divorce was a real financial “wake-up call”
- 73% of married women feel financially secure
Although fewer widowed respondents (43%) said losing their spouse due to the spouse’s death created a financial crisis, a full 60% felt the loss of their spouse served as a financial wake-up call.
These responses came despite the fact that the majority of women in the study (51%) claimed they are the chief financial officer (CFO) of their household, and more than two-thirds (68%) of women said they currently feel financially secure, with that number rising to 73% for married women.
Divorce, or becoming a widow, creates turmoil for women
“It’s clear that no matter how confident women feel about their current financial situation and ability to manage money, divorce and/or becoming a widow can create turmoil that has lasting effects,” said Allianz Life Senior Director of Consumer Insights Deb Repya. “It’s important that women play an active role in every aspect of their family’s financial planning so they are better prepared for whatever challenges the future may bring.”
Divorcee Top Worry – Running out of Money When asked what worries keep them up at night, more than a third (34%) of women in the study identified “running out of money in retirement” as their top concern. Not surprising, this fear was much higher for divorcees and widows with half of all divorced respondents and a full 40% of widowed respondents ranking it as their biggest worry.
Furthermore, divorced women said they struggle the most with saving enough to meet their goals, with 65% agreeing it’s hard to save for both short- and long-term goals because they live paycheck to paycheck. This response was significantly higher than that from either single (51%) or married (47%) respondents.
Preparing for an Uncertain Future Working with a financial professional can help mitigate the uncertainty that comes with the loss of a spouse. Currently, only 30% of women in the study reported using a financial professional for guidance, but 75% of those who do say they wish they had done it sooner.
While connecting with a financial professional can help instill confidence to deal with future challenges, these relationships can be problematic, as many women say they feel left out of the financial planning conversation. More than half (51%) claim the professional treats their spouse/partner as the decision-maker, and this happens regardless of whether the financial professional is male or female.
Helping the Next Generation
Today’s women also feel compelled to share their knowledge with younger family members. When asked what advice they should pass on to their daughters/granddaughters, more than 80% of both divorced and widowed respondents said, “don’t depend on others for your financial security.” Similarly, more than three-quarters of divorced and widowed respondents also advocated “planning early” and for the next generations to “have a financial plan.”
“It’s never too early to start building up your financial acumen, whether that means researching financial topics on your own, getting more practice by taking on increased responsibility at home or communicating the importance of financial planning to younger family members,” added Repya.
About Allianz Life Insurance Company of North America Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2016, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. In 2015, Allianz Life provided a total of $2.6 billion in benefit payments that supported policyholders’ financial objectives. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 142,000 employees in more than 70 countries worldwide. More than 85 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.
*The Allianz Life Women, Money, and Power Study was commissioned by Allianz Life Insurance Company of North America in October 2016 with some questions resurveyed from the 2013 Allianz Women, Money, and Power Study. 1,416 women, ages 25-75 with household income of $30,000/year or higher, completed the online survey.