Divorce can add 10 years to the working lives of Australians as they battle to re-establish the wealth they had in married life, according to Suncorp research.
Suncorp’s Untying the Knot report lifts the lid on the hidden cost of divorce for Australia’s 900,000 divorcees. Suncorp Head of Advice, Stephen Daly, said the most common considerations during divorce were property, child custody, the family car and the partner’s income.
However, thousands of dollars were often excluded from the settlement because superannuation was not taken into account. The study found 83 per cent of divorcees didn’t consider superannuation in their divorce settlement.
“The hidden cost of divorce is that it adds 10 years to your working life, and this is the reality for around 100,0001 Australians each year,” Mr Daly said. This is how long it takes to establish the same wealth and lifestyle one had in married life.
The majority of married Australians expect to retire in their mid to late 60s, while divorcees expect to work well past 75, preventing them from getting the most out of their golden age.
“Legally a divorcee is entitled to half their partner’s super, so considering super during divorce could mean the difference between being able to retire when you want to, or working well into your 70s and beyond,” Mr Daly said.
“It’s particularly important for Australian women to consider their partner’s superannuation, as our survey shows that divorced women are more than twice as likely to feel like they need to be smarter and more resilient when it comes to money.”
Given that Australians are most likely to divorce in their early to mid-forties, there is a considerable amount of superannuation involved, with a 45 year old male’s average superannuation balance at around $128,0002 . This compares to $42,000 for women at the average age of divorce.
There may also be broader financial implications when getting divorced, including the need to review any estate planning arrangements and investing the proceeds of a settlement, both tax-effectively and in line with your expectations for growth and income.
Suncorp’s Untying the Knot report paints a picture of what an average divorce looks like, including stunning insights into Australians’ attitudes to lifestyle and financial arrangements:
- Approximately 50,000 divorces occur every year in Australia
- The average age of men at divorce is 45, while for women it is 42
- One in two divorces involve children (47%) and typically involves two children
- January is the most popular month of the year to call it quits
- Queensland is the divorce capital of Australia (2.5 per capita) while the Northern Territory has the lowest rate of marriage breakdowns in the country (1.5 per capita).
More Information
If you’d like to take action to grow or protect your superannuation savings, please contact your local Suncorp Financial Planner or call Suncorp Advice on 13 11 55.
- http://www.abs.gov.au/ausstats/abs@.nsf/Products/C57C2452D7E55A44CA257AC50011310C?opendocument
- http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/4125.0Jan%202013?OpenDocument
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