Full Document

FormatFile SizeNotes
PDF file 0.5 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

In this paper, we consider the implications of divorce on retirement security. We introduce a theory that highlights how specialization within a divorcing household and timing of divorce relative to planned timing of retirement savings can have a negative impact on retirement security. Using panel data from the Health and Retirement Study (HRS), we evaluate differences in accumulated total and liquid retirement wealth at retirement ages. We replicate past findings that find a negative relationship between ever-divorced individuals and asset accumulation, particularly for women. 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 for men the relationship is worse for men who divorce in their 50s compared to men who divorce in their 30s. Using the household nature of our data, we compare assets of households before a separation leading to a divorce to those of each individual after that separation. We find evidence of swapping and liquidation of retirement and housing assets: 51 percent of separating households with liquid pre-separation retirement assets will have at least one household member with zero liquid retirement assets after separation. Finally, we develop a methodology to evaluate whether near-retirement divorce impacts retirement decumulation. We conduct a differences-indifferences 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, as well as permanent unobserved differences. We find that separated women are more likely to delay Social Security retirement benefit claiming until age 65 or 66, but otherwise we find no significant evidence that divorce is associated with differential decumulation of liquid retirement assets.

Table of Contents

  • Chapter One


  • Chapter Two

    Previous Literature

  • Chapter Three

    Division of Property in Divorce

  • Chapter Four

    A Simple Model of Asset Accumulation

  • Chapter Five


  • Chapter Six


  • Chapter Seven


  • Appendix A

    Multivariate Analyses of Retirement Assets

  • Appendix B

    Asset Division By Subcategories

  • Appendix C

    Additional Propensity Score Matching Estimates

This research was conducted by RAND Labor and Population.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.