Retirement And Survival After Gray Divorce
Gray Divorce (divorce after 50) is on the rise for Baby Boomers. There are several reasons why this climb is happening, but there are a few things that are important with this. Our life expectancies are much longer, and people do not want to waste time being unhappy. Divorce in general is on the rise, and people are more comfortable walking away now that their neighbors and friends are doing the same. This can have a tremendous impact on your retirement and financial future, especially if you are close to a retirement date.
If retirement has been on the horizon, you were planning for a certain retirement lifestyle. You might have worked with a financial advisor, and they may have helped you save into different types of accounts to make this happen. Now we are looking at two households and experts estimate that you may need significantly more, possibly close to 50% more. We now must look at multiple homes, multiple cars, separate vacations, etc. This can eat away at the retirement funds since it was not initially planned for.
You may need to reduce your retirement lifestyle or push back retirement and save additional money. Selling the marital home may be necessary so that you can split the proceeds. The equity in the home may be significant and may be a good option to try and split so retirement can still be in the picture. I know the house can be a huge issue, so looking at all options truly does make sense.
Some people push back divorce until the kids are out of the house. Some parents feel they would rather stay a united front while the children are younger and go their separate ways once the kids are grown and out of the house. However, I have seen this backfire with some instances, where the kids feel the parents should have done it years ago.
Many Baby Boomers are in their 2nd, 3rd or even 4th marriages. Studies show these marriages tend to have a lower success rate. A prenup or postnup can be great options, especially if you have been married before. This can set forth the division of assets, liabilities, and spousal/child support in the event of a separation or divorce.
Illness and disability may also be something you are worried about. When there are two people, there is comfort in knowing that if one of you becomes ill or disabled, the other partner will be there. After divorce, that burden could fall to your children or hit that retirement account again when you need to hire help.it can help to talk about these issues on the front end with a financial professional.
Sometimes a mediator or health professional can help when trying to negotiate with your spouse. If conversations are hard to have or it just isn’t working, having a neutral third party can assist in this process. Be sure to hire the right team of professionals for this process. Save time and money - for everyone!!
With the children likely being grown, the main devastation of a gray divorce will be the finances and your emotions.
Certified Divorce Financial Analysts (CDFAs) are specially trained in finances in divorce and can help you make sure you are covering all the necessary issues. CDFA’s can also help assist with paperwork for assets to be split. Sometimes tracking down the paperwork, how to fill it out and even where to send it can be overwhelming and confusing. Whether or not a certain asset makes sense to split or can even be split may also arise. They can help you see with certainty if you can keep the house, if spousal maintenance is necessary, and how to split the Pension. Ultimately, your best bet for survival, let the professionals handle the finances and legalities, that way you can take care of you.