According to an ongoing study conducted in the US, the old adage “if you get divorced, you give your spouse half” is actually wishful thinking. The true figure according to a study by research scientist Jay Zagorsky of the Ohio State University Centre for Human Resources Research, is more like three quarters.
In his study, Zagorsky has been tracking the wealth and marital status of 9,055 people since 1985. The study is ongoing. The current participants in the study are now aged 45 to 53 years old. The results might not be identical for older or younger Americans and equally may not be parallel in Australia, however, I think there are sufficient similarities between our cultures and sufficient constants in human nature that make the results generally applicable, if not interesting.
The interim report in the study shows that married people accumulated 93% more wealth than single or divorced people. This, in my view, is a staggering finding. Zagorsky suggests a big reason married people accumulate more wealth is simple, “…economies of scale. One household is cheaper to maintain than two”. He further goes on to say “Divorce looks like one of the fastest ways to destroy your wealth”.
The study found that people who divorce started losing their net worth four years before their divorces were final and suggests the reason for this is because people may have separated and been forced to support two households for some time before the legal finalisation of the divorce.
The study also found that men fared better than women after divorce in financial terms, holding about two and half times the wealth of their spouse, however, in terms of raw dollar amounts the difference is not so vast given the finding that after divorce the majority of men and women in the study had net assets, excluding retirement benefits, with a total saleable value of less than $15,000. That indicates that both men and women never really financially recover after divorce.