Over the last few years, one trend in divorce has firmly taken root. Baby Boomers are divorcing at double the rate of other groups. As our life expectancies lengthen, our attitudes about divorce evolve. And while it’s not still rapidly increasing quite as much, Boomer divorce is likely here to stay. So is the sad fact that divorce after age 50 can be financially devastating, especially if you’re close to a planned retirement.
Let’s say you have set aside a comfortable retirement nest egg intended for those golden years spent together as a couple. Now those same funds will have to support not one, but two households. Estimated expenses after divorce are anywhere from 30%-50% higher than if you remain together. Your dollars must now fund two of everything: homes, cars, separate vacations, trips to see the grandkids, etc. This duplication can eat into a retirement fund at an alarming rate.
More than likely, to address this additional need you will face some difficult financial choices. You can either reduce your standard of living, work longer, increase your savings, or any combination thereof. You may have to consider selling the marital home to split the proceeds, so both parties can downsize. That home equity can generate income to live on, so selling may make a lot more sense than one of you trying to keep it. It’s critical to have a detailed financial analysis of all your options completed.
Illness and disability may also force some tough financial decisions. As a couple, there is comfort in knowing that if one of you becomes ill, frail, or disabled, the other partner will be there to help care for you. After divorce, that burden for care could fall to your children or hit your nest egg again when you need it the most … to hire additional help to aid with home care.
With the children likely being grown, a huge consequence of a Gray Divorce will be the effect on your finances. If you find yourself contemplating divorce after age 50, some ideas to consider to minimize the damage in the process are: 1. Be as cooperative and honest with your spouse as possible, 2. Consider using less litigious and out of Court processes such as Mediation and Collaborative Divorce and, 3. Get prepared by having all your financial documents identified and organized.
In addition, consider using a divorce financial professional such as a Certified Divorce Financial Analyst® (CDFA®) as a resource, along with consulting a Family Law Attorney. A CDFA® is specially trained around finances in divorce and can help you make sure you are fully educated about the entirety of your financial picture. They can help you see with certainty if you can keep the house, if spousal support is necessary, and how to value and offset or divide a pension. It’s well worth the effort to consult with a CDFA® to help you understand all of your options.
Ultimately your best bet for survival is to let the professionals handle the finances and legalities. That allows you to focus on taking care of yourself and your family.
At Sand Oak Divorce Solutions, we help you successfully navigate the financial aspects of your divorce with calm and confidence. Contact our office at (850) 252-6325 to schedule your initial consultation.