Women retire with about half the retirement savings as men. For many women, this can be a direct result of taking a step back in their career to raise children. The effects can also be exacerbated by a marital breakdown, as Karen, a divorced mum of four boys in her early 50s, learnt the hard way. Here, she shares her story of love, loss and finding her way back to financial freedom.
Heartbreak and financial insecurity
Hindsight is a funny old thing.
When you’re 23 and meet “the one”, you think it’ll be forever.
Sadly, for many of us, the dream doesn’t quite work out like that.
I met John at our local pub one Friday evening. I was out with friends celebrating my first real work promotion, and I noticed this big, gruff tradie looking at me. He raised his glass and promptly spilled beer down the front of his shirt. Next thing I knew, he was standing next to me, informing me that I owed him a drink. A few giggles later, and I was smitten.
Fast forward 20 years and four sons, I suddenly found myself a divorced single mother.
Not only was I dealing with the emotional toll of a messy breakup, but I also faced an uncertain financial future – which, quite honestly, is what scared me the most.
Young and in love
When you’re young, you don’t tend to think about what could go wrong in a relationship.
Certainly, for John and I, who were inseparable from the start, the idea that wheels would eventually fall off our relationship was inconceivable.
We got married five years after we first started dating, and it seemed like the world was at our feet. While I never considered myself to be the old-fashioned type, I agreed with John that I would become a full-time mum after I gave birth to the first of our four boys.
When John started his own business not long after the birth of our third child, I was itchy to get back into the workforce, and decided to split my time between raising the kids and helping with the back-end administration of the business. But I declined to get paid any super. I was happy to keep that money in the business, and I was confident that our profits would be sufficient for our future retirement. But I declined to get paid any super. I was happy to keep that money in the business, and I was confident that our profits would be sufficient for our future retirement.
Ah, the misguided confidence of the young and the reckless!
I can’t really pinpoint exactly when things started to go wrong in our marriage. It wasn’t any one incident, really, but more like death by a thousand cuts. That drunken, boyish charm that was so endearing in our 20s was no longer so charming in our 30s and even less so in our 40s as we juggled kids, work, mortgages and bills.
Things escalated quickly once John started sleeping in the spare room, and the dreaded ‘D’ word (divorce) began to be mentioned. But the final nail in the coffin was when I learnt of John’s affair. I won't get into the sordid details – suffice to say that finding out about his betrayal was the single most painful, gut-wrenching experience of my life. It was the first moment, really, that I understood the bond I had forged with the father of my four sons over so many years was well and truly over.
“I was happy to keep that money in the business, and I was confident that our profits would be sufficient for our future retirement.”
Regaining financial independence
I know now that relying on someone else for my retirement was a mistake. As easy and tempting as it is to succumb to the fantasy of living happily ever after, the grim truth is that one in three marriages end in divorce. That dashing prince you pin all of your hopes and dreams on could just as easily turn out to be a toad.
I was fortunate enough to get in touch with both a financial planner and a family lawyer relatively early on after the separation. They were able to help me navigate through the process of disentangling my life from my ex-husband’s and, ultimately, see light at the end of the tunnel.
My financial planner, Sarah, helped me figure out a workable game plan for both my everyday finances and my retirement. I tracked down my old super account from when I used to work full-time and was happy to find I still had some money there.
Obviously, my super balance was well below what a woman of my age should have, given my extended period of time out of the workforce, but it was something entirely my own, and I was grateful to have it. Finding this money was an essential part of restoring my sense of self-worth, and it gave me confidence that I could stand on my own two feet, even though it had been so long since I’d had to be truly independent.
My family lawyer, Mary, assisted me with negotiating my fair share of John’s assets (minus legal costs, which were not insignificant), and I’ve invested as much of this as I could into my superannuation.
These days, I’m a lot smarter about my own financial future. If I could go back in time, I’d do things very differently, but I’m fortunate that I was able to salvage a bad situation and ensure I could still support myself and my four kids. I know many women are not so lucky.