Domestic Strain
On top of all the stress of losing a job and shuffling work and home duties, women in unhealthy relationships and on the verge of divorce are stuck at home with soon-to-be exes.
Lili A. Vasileff, a financial planner specializing in money and divorce, points out that there is nowhere to go when the courts have shut down. “It’s not as if you can run to the court and say you want to file for divorce and then have an attorney protect you somehow by kicking out your spouse from the house or you are leaving. You are stuck, and you have a lot of challenges you have to get through,” says Vasileff, president of the firm Wealth Protection Management in Greenwich, Conn.
In the July 2020 issue of Financial Advisor, Vasileff asked “Is a Divorce Tsunami Coming?” She says the tsunami is now here. “I don’t know of any professional who is not super busy,” she says, noting that people may not have seen or heard about the wave of divorces because couples are seeking alternative dispute resolutions while the courts are closed—they’re either seeking mediation or “collaborative divorce,” which means the papers aren’t filed in court until the agreements are reached. She says attorneys are telling her that they are unable to get court dates until October.
One trend that’s been picking up in the last decade or so is “gray divorce,” where people over 50 leave long marriages, Vasileff explains. Another trend is that women age 50 to 64 are the ones initiating these breakups, but she adds that women have more significant money concerns after divorce than they do during marriage.
Citing surveys by Pew Research and Gallup Poll, Vasileff says women often don’t know how much it costs to live in retirement. “And the kicker to that is they think Social Security is going to be their primary source of income, and we all know how much that is if they are depending on the spouse’s record. It’s like half of that,” she says, explaining that the most you could possibly get this year is around $23,000. “So, if that doesn’t knock you off your feet, I don’t know what would.”
Carrie Gallaway, a managing partner at YorkBridge Wealth Partners in New York City, says her business clients are managing well because of the PPP loans they received. “Everybody who wanted one got one,” she says, noting that, while struggling, none of her clients had to give up their business.
Financial advisors have helped, she says.
“Thinking back to March and April and even a few times through the fall, there definitely were clients who, if they had not had our guidance, they would have either sold out their portfolios or not been able to get the PPP loans,” she says. “So really the ability to have somebody who is a partner and really is an advocate for them and their long-term goals was in a way probably life-changing.”
She says advisors can help clients face the financial curveballs bound to come at them. She posits that women especially feel they should do things on their own. “So, they almost feel like if they ask for help, then somehow they are a failure, but it’s the silliest thing because it’s like people will use a personal trainer all the time because they know they are not going to be motivated to exercise.” She adds that financial advisors make sure you are staying on track and doing contingency planning.
Women, Connell says, are too complacent about their portfolios. “They don’t look at their portfolios on a continual basis. They just throw their money into their 401(k)s and let it cruise,” she says. “We are just not very good about being strategic and tactical. We just assume it’s going to take care of itself and we let it fall off the radar, but women need to keep looking at that, even though we are in unusual circumstances.”
Vasileff, who also does pro bono work, says debt is also a problem, particularly for people going through divorce. She posits that people do not save enough. “That’s always been one of those sad statistics about the U.S., that we just aren’t a nation that saves enough, and I think when times are bad, people aren’t hesitating to invade their retirement assets, and that has long-term impact,” she says.