Studies are showing that more and more couples are calling it quits well into their 50s. Getting divorced this late in life creates a completely different set of problems than getting divorced in your younger years.
Most people really ramp up their retirement savings when their in their 50s, so suddenly getting your income cut in half can ruin your plans. On average women experience a 41% drop in income, and men experience a 23% drop. This drop forces new singles to reevaluate their plans.
If you’re getting divorced in your 50s here’s a few things to keep in mind.
- Make a plan– If you and your former spouse created a financial plan to map out your road to retirement, you’ll need to do some rerouting now. Meet with a financial planner and figure out all your expenses, income sources, and retirement accounts to see where you are and what it takes to get to where you want to be.
- Cut expenses- Because your income most likely just went down, you’ll need to find ways to cut your expenses. This might mean downsizing your house, trimming the entertainment budget, or canceling unnecessary services.
- New will- If you’ve done estate planning or have life insurance you may need to change the beneficiaries. The last thing you want is your ex-spouse to end up with your inheritance. Power of attorney or health care directives also might need changing.
- Don’t panic- This is a scary situation, but the last thing you need to do is panic. Too many people make the mistake of instantly draining their retirement accounts, which can create big problems down the road. A divorce decree can allow to collect some assets without penalties, but do your best to not cash out all your assets.
No matter what stage of life you’re in when you get divorced, an experienced divorce attorney can help guide you through this difficult time and avoid common pitfalls.