How Does a Divorce Later in Life Affect Retirement?
Perhaps you are on track with your long-term savings plan and now face the prospect of divorce. How will this affect your finances? What does this mean for your retirement savings plan? How divorce impacts your financial situation depends upon many individual factors. However, dissolving a marriage later in life does impact your retirement more significantly than it does if you divorce when younger.
Late in life divorce is on the rise
The number of couples in their 50s and 60s who are divorcing is on the rise. Some of these couples may have waited until any children are grown before choosing to split, thus avoiding any child custody or child support issues. However, they are now faced with maintaining a single lifestyle on a reduced budget.
Less time to rebuild assets
Divorce usually involves dividing up assets – including a home, property, and savings accounts – and each partner may end up with half of what they previously had. Couples also face higher living expenses when they split up and no longer share the same quarters. While having less money and having increased expenses is true for divorcing couples regardless of age, the impact is far greater for couples who are further along in life. Why? Those who divorce at a younger age have more time to recoup any financial losses incurred as a result of the divorce. Those who divorce later in life, however, have fewer working years remaining and have less time to rebuild their assets.
Keeping the house
Many marriages have a significant amount of money tied up in the house. When divorcing, the couple must decide if one person will remain in the home. This is often a difficult decision because it is an emotional one – to many, a home is not merely a building but a place where years of a life together were spent. In choosing to stay in the home, that spouse may have to relinquish retirement or other assets. Factor in the additional costs of home maintenance and property taxes, and remaining in that home becomes even more challenging when single.
Questions about divorcing later in life? We can help
Divorce can be difficult and emotionally-draining. When couples divorce later in life, they face the additional financial strain of providing for their retirement years. By taking certain measures, you can minimize your risk and protect your retirement savings. The experienced divorce attorneys at Dotson & Taylor Attorneys at Law in Murfreesboro work with those who are divorcing later in life to assess their financial situation and plan for life post-divorce. To schedule a confidential consultation to discuss your situation, contact a member of our team at 615-890-1982 or online.