It is usually an uncomfortable situation, to say the least, to settle a divorce amicably, let alone, fairly. That is further complicated when the divorce happens so near to retirement that neither party has the time to create any further wealth before the need arises.
Which often causes the retirement plans of both parties to be significantly reduced, both financially and strategically.
The plans to own a second home in a warmer climate are diminished as the need to carve out enough funds to make it work for two separate homes is heightened. And the plans to stop working at a time when one is probably least employable are also dashed.
I am certainly not advocating “no divorce” since I see so many people who are much happier after the divorce and the price of freedom outweighs that monetary loss.
I do hope people consider the potential reduction of their financial security because of the divorce and plan for it ahead of the action. Some would argue that is not always possible. This is true, especially if you are the one who is at the other end of the action.
If you are the one contemplating taking the action, and are in your late 50s or older, please consider what resources you would have to support a healthy retirement. Is your 401k plan properly allocated to allow for some growth as well as some conservation of the assets? Do you have a pension which would give you a solid base to pay for your basic living expenses? Especially if it were cut in half? Will you count on Social Security at your full retirement age (66 or later) or at an earlier age to give you some income at age 62? Would your spouse’s Social Security benefit be higher than yours?
Do you want to live in your marital home or would you like to move to a smaller apartment in your home town or somewhere else? How much would it cost to maintain a comfortable lifestyle? If you work with a financial planner to help you see where you would possibly end up, you might be more prepared to file the divorce papers knowing how this would affect not only your current lifestyle but your years in retirement. It’s worth a look.
Let us help you figure it all out.