Divorce Financial Realities as a Senior
Marriage is typically good for your health. So why exactly are more older couples suddenly heading to divorce court?
Disconnection, according to Jeff Rattiner, CPA, CFP® and author of Personal Financial Planning for Divorce. “Once the kids are grown and you have more free time, couples realize they no longer have much in common.”
The phenomenon known as “gray divorce” is on the rise. According to the U.S. Census, nearly 35% of all divorces last year were among couples 55 or older.
Those numbers may lead people to believe that getting a divorce is an easy solution. Not quite, according to Rattiner, who cautions his clients to be 100% certain and think through all aspects of splitting up before making a decision.
For example, he says, “The financial aspects of divorce at a later age can be devastating. Together, you’ve saved for a certain scenario and have plans for retirement. Suddenly, you now have to fund 100% of those costs alone.”
Rethinking your retirement plan
The biggest issue, according to Rattiner, is figuring out how to make the numbers work in a compressed time frame.
“Redesigning your financial plan is a significant move at this age. Couples who divorce in their 30s or 40s have the luxury of time to ramp up their savings. So it’s important to think things through rather than acting in the moment.”
If you choose divorce after careful consideration, Rattiner recommends taking these steps:
Change your passwords as soon as you’ve made a decision. This limits the possibility of financial retribution should your partner react poorly to the news.
Make a list of what’s important to you. That might be a particular asset or possession, or safeguarding the inheritance of your children from a first marriage.
Seek advice that’s specific to your needs. Divorcing later in life comes with different ramifications, so be sure to connect with an attorney, financial advisor and other trusted professional who has experience dealing with your situation.
Rattiner reminds clients that it’s not business as usual during and after a divorce, so think about potential ramifications ahead of time and do everything you can to protect yourself. He adds, “You better be really sure, because once you start the process, there may be no turning back.”
Take steps to protect your retirement financial security
There’s no doubt that divorce at any age takes an emotional and financial toll. For older homeowners that may suddenly need to rethink retirement financials after a divorce, one often-overlooked asset you can put to work is your home equity.
A reverse mortgage loan allows a homeowner or buyer to turn built-up equity into funds you can use for any purpose. Certain requirements apply, so click here to see if you’re eligible. If you’d like to learn more about how a reverse mortgage works, reach out to Reverse Mortgage Funding or call (888) 277-1567 and we’ll connect you with a knowledgeable specialist in your local area.
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