Financial Planning for Retirement After a Grey Divorce: Key Considerations
The rising trend of “grey divorce” – couples splitting after age 50 – has created unique financial challenges for those approaching retirement. While ending a long-term marriage is emotionally complex, the financial implications can be equally daunting. Here’s a comprehensive guide to rebuilding your financial future after a late-life divorce.
Understanding the Impact
Grey divorce often hits retirement plans particularly hard. Assets that were meant to support one household in retirement must now stretch to cover two. According to recent studies, individuals who divorce after 50 typically experience a 45% drop in their standard of living. Women are often more severely affected, with their household income dropping by an average of 45% compared to 21% for men.
Essential Steps for Financial Recovery
- Reassess Your Retirement Timeline
Don’t automatically stick to your original retirement date. You may need to work longer to rebuild your nest egg. Consider part-time work during retirement or developing new income streams through consulting or freelance work. - Review and Adjust Your Investment Strategy
Your risk tolerance and investment goals likely need adjustment. Work with a financial advisor to create a new investment strategy that aligns with your changed circumstances and timeline. - Maximize Social Security Benefits
Understanding your Social Security options becomes crucial. If your marriage lasted 10 years or more, you might be eligible for benefits based on your ex-spouse’s work record without affecting their benefits.
Resources
United States Resources
Canadian Resources
Citations
- AARP Research on Late-Life Divorce, 2021
- National Center for Family & Marriage Research, Bowling Green State University