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Women: Remarrying May Make You Happy But What About Your Financial Security?
by Anita Saville

(Anita is the publisher of Purse Strings (www.pursestrings.org), the financial newsletter for women based in Chelmsford, MA.)

Three women in four remarry after a divorce or the death of a spouse. But the new marriages may have a downside: A new study suggests that these women may be worse off financially than if they stayed single. The financial decisions that second-marriage couples make, along with a patchwork of state laws that ignore changing family structures, can put divorced or widowed women at financial risk when they remarry or choose husbands who have been married before, says Marjorie Engle, author of The Divorce Decisions Workbook and President of the Stepfamily Association of America.

There is a difference between the financial security of a family and a woman's personal financial security. As the traditional care giver in a marriage, a woman who has been working and accumulating wealth while on her own may leave her job or reduce her hours when she remarries. If she does, she loses personal income, retirement savings, and other benefits. If the second marriage falls apart early on, she will have limited her personal financial resources without the financial safety net that family law gives women who divorce after more time. If her new husband dies, he is likely to leave the bulk of his estate to the children from a previous marriage.

Women who keep working may also fall behind. Initially, remarried couples tend to share family expenses. This is often a 50/50 split, even though the spouses' incomes are not equal. This leaves the wife with a smaller portion of her income for savings.

At the same time, the wife is likely to spend a larger share of her income than her husband does on consumable items such as extra clothing for the children or a family vacation. Such spending may make the new family more comfortable, but provides no long-term tangible evidence of the wife's financial contribution. Meanwhile, the husband is using more of his income for durable assets like investments that enhance the family's long-term financial health. In a subsequent divorce of a short-term marriage, a wife does not have an automatic right to share in such assets.

Other areas that impact women are changes in tax-rates, the stepfather's lack of financial responsibility for her children, and the government's view that the stepparent in a custodial household will contribute to the stepchild's college costs.

Advice? Couples with both separate and joint accounts respect the personal financial security of each partner. In these cases money is not used to control the relationship. And if it is difficult to discuss money issues, make an appointment with a financial advisor who is trained in stepfamily dynamics and will raise the issues that you can't. These may include issues about existing debt, future household expenses, and each partner's financial responsibility to the children involved. An advisor can also help you with longer-term decisions related to retirement security and estate planning.


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