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Retirement And Survival After Gray Divorce

As the pace of our lives continues to get faster and faster, one trend that has evolved is that Baby Boomers are divorcing at double the rate from the late 20th Century.  As our life expectancies continue to increase, our attitudes about divorce continue to evolve.  And while the pace has slowed, Boomer divorce is likely here to stay. So is the sad fact that divorce after age 50, gray divorce, can be financially devastating, especially if you’re close to a planned retirement.

A comfortable retirement nest egg has been set aside to finance those golden years spent together as one.  Now those same funds will have to support not one, but two of everything:  two homes, two cars, separate vacations, separate trips to see the grandkids, etc.  This duplication can eat into a retirement fund at an alarming rate.  

Experts estimate that expenses after divorce are anywhere from 30-50% more than if you stay together.  This could translate into some difficult choices. You may have to reduce your standard of living, retire later, or retire and work part time.  You may have to consider selling the marital home and splitting the proceeds causing both parties to downsize.  Splitting assets may impact you immediately or lead to financial adjustments in the long term.

If you were a non-working, or limited-working, spouse, you may have to seek new employment.  This is never easy, especially if it requires additional education or experience.  This situation could add one more transition that must be dealt with.  Developing a plan on how to accomplish any transitions will help you recognize the implications involved in any transition.

Illness and disability may also force some difficult choices.  As a couple, there is some comfort in knowing that if one of you becomes ill or disabled the other partner will be there to help care for you.  After divorce, that burden could fall on your children or hit that nest egg again if you need to hire help.

If you find yourself considering divorce after age 50, the best thing you can to do to minimize the damage and reduce stress is to become prepared. Get organized with financial documents.   Try to be as cooperative with your spouse as possible without feeling like you are just giving in. Most importantly, to minimize the financial toll, be sure to hire a financial advisor along with an attorney or mediator.  Don’t go at this alone.  Get trusted, non-judgmental, family or friends to come along side you.  Don’t be afraid to seek out professional counseling.  If you still have children at home, they will also need some type of support system as well.

If there are no children living at home, the main devastation of a gray divorce will be financial and emotional.  Certified Divorce Financial Analysts (CDFA®) are specifically trained in the area of divorce finances and can help make sure you are covering all of the necessary issues.  Issues like keeping the house, spousal maintenance, and how to split the Pension.  Although some attorneys or CPAs have the credential, it is well worth the money to add a CDFA® to your team.  Ultimately, your best bet for survival is to let the professionals handle the finances and legalities, so that way you can take care of you.


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