Don’t Let Divorce Ruin Your Retirement
For all married couples, the biggest issue that can threaten them is divorce. Divorce can wreak havoc on one’s assets at any age, but this is especially true when a couple is in their 50s and beyond. This is because retirement is near and splitting assets so close to the end of one’s career can cause huge financial headaches.
Many couples have seen their pensions, 401(k)s, IRAs and other retirement assets cut in half in a divorce. This can be devastating to someone who is just a few years from retirement. This loss of income often requires a change in plans. A person may need to sell some assets, downsize their home, save more aggressively or work a few years longer than expected so they can retire comfortably.
A divorce will no doubt impact your retirement, but you don’t have to let it destroy your plans. Here are some tips to keep in mind.
Set a Budget
In a divorce, one household is split into two. This means your money won’t go as far as it used to. You will need to figure out how you will afford to live on your own. This means going through all your income and expenses and creating a budget. Cut out items that are not essential. Start saving a little at a time.
Now is not the time to retire. If you can keep working, do it. You need to reevaluate your future and adjust your goals, and this means earning more money in the meantime. Divorce and living on your own is expensive, so expect to keep working for a few more years in order to save up. In fact, in order to keep your health insurance, you may want to continue working until at least age 65.
Delay Social Security Benefits
The longer you wait to get Social Security benefits, the better. While you can technically start receiving benefits at age 62, you’ll only receive 75%. If you wait until age 70, then you will receive the maximum value every month.
Consider Selling Your Home
Many couples feel emotional about the thought of selling their marital home, but after a divorce, there’s really no point in living in that home by yourself. You may have had some happy memories there, but it’s time to move on. Plus, a home comes with so many extra costs, such as maintenance and insurance. Can you afford all these expenses post-divorce? A home can quickly become a financial burden, so consider selling and downsizing to a place where you can comfortably retire.
Seek Help for Your Divorce
A divorce is a huge step that can impact your marriage in many ways. If you divorce later in life, it can also affect your retirement. Make sure you protect yourself.
You likely have many questions about splitting assets and the divorce process in general. The Dade City & Zephyrhills divorce attorneys at Madonna Law Group can give you the answers you need so you can move on. Contact our office at (800) 557-0411 to schedule a consultation.