Impact of Divorce on Retirement Security

Angela Hung, RAND Corporation
David Knapp , RAND Corporation

Using panel data from the Health and Retirement Study (HRS), we evaluate differences in accumulated wealth at retirement ages. We find that the negative relationship in our sample between wealth and divorce without remarriage is worse for women who divorce in their 30s than for women who divorce in their 50s whereas the reverse is true for men. We evaluate whether near-retirement divorce impacts retirement decumulation by conducting a differences-in-differences matching analysis that assigns individuals who eventually divorce within the HRS to similar, but non-divorcing, individuals at first interview. This analysis controls for observed differences between the average divorcee and the average continuously married person prior to the divorce event, as well as permanent unobserved differences. We find that separated women are more likely to delay Social Security benefit claiming and work longer, but otherwise find no significant evidence that divorce is associated with differential decumulation of liquid retirement assets.

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 Presented in Session 118. The Economics of Divorce