Tips On Retirement After Divorce

By on May 9, 2015
retirement after divorce

Tips On Retirement After Divorce

retirement after divorce

In today’s two-income-couple world, retirement after divorce can be complicated. Planning that had once seemed so straight-forward and easy during marriage can be a pathway strewn with pitfalls once a divorce has been finalized. The very life choices that made planning for retirement so easy, pooling your resources while splitting your expenses, can cause retirement after divorce to be messy without some planning and forethought. With divorce the income is split in half or more while the costs to maintain a household remain close to the same. That is why it is important to rethink your retirement plans. Here are a few tips to help you get started.

Personal Finance Team

During the divorce each individual should retain their own financial advisor, accountant and any other type of specialist to advise them on their best approach to the divorce negotiation. They should be advising you on:

  • Real Estate
  • Investments
  • Taxes
  • Estate and Retirement Details

You may want to keep them on to help you after the divorce or you may want to interview others to replace them. In any event, you will need advice on these both during and after your divorce to help you meet your financial needs and goals.

Review Your Budget

Your needs and assets will change after the divorce. This is often especially true for women. By tracking your new spending you can create a reasonable snapshot of your new financial reality and budget for it. If you have problems determining if your current finances will allow you to retire within your means, you can use this handy site for making the calculations.

Review Assets And Social Security Benefits

After the divorce is finalized, go over all retirement accounts including your 401(k) and any other investments you made jointly. Talk to your investment counselor and employer plan administrator to be sure you remain on track for your retirement plans. Review your social security plans and if you can do it, put off taking your benefits until 70. It is also important to remember that if you have been married 10 years or more and remain single at retirement, you may be entitled to a portion of your ex-partner’s social security benefits.

Retirement After Divorce

Reviewing your finances and plans for retirement after divorce can reveal shortfalls. Knowing them now means not having them surprise you at a later date. If you take an honest look at your financial situation and plans for retirement upon finalization of the divorce, you can make adjustments going forward. The bottom line is always that planning ahead today means enjoying your retirement later.