Gray divorce, or divorce among couples aged 50+, is on the rise nationally, and according to the Pew Research Center it has doubled over the past 25 years.
In addition to the wide range of emotions that accompany any divorce, a gray divorce can lead to particularly significant financial ramifications since the couple is closer to retirement age and may not have as much time to rebuild or boost their individual wealth.
After finding a good lawyer, people going through a gray divorce should also ensure they have a good wealth manager. That advisor should be an important part of their “transition team” that assists with dividing assets and helping them adjust to their new normal.
Get Back on Track
And soon after the dust settles, you need to work with your wealth manager to:
- Conduct a lifestyle analysis—Make sure you’re fully aware how drastically (or not) your standard of living may change. Look at the portion of wealth retained from the divorce and determine if that amount is enough to allow you to maintain your standard of living before and during retirement. For instance, do you need to give up your house because you won’t be able to afford it post-divorce?
- Set new wealth goals—Consider when you want to retire and determine any gaps between your current and desired savings/financial situation. Then set savings and investment goals that will meet your needs. Also, determine your tolerance for risk.
- Make a plan—Create a personalized wealth management strategy that meets your needs, wants and goals. Work with your advisor to look for opportunities to save and invest in ways that can rebuild your financial security; support your current lifestyle needs; and position you for potential near-term or short-term retirement.
- Educate yourself—In many relationships, it’s common for only one spouse to handle the money. If that was not you, it’s time for you to go out and take a personal finance class. Look to your community college, or even online, for courses on how to handle the basics.
If you find yourself going through a divorce, we’re happy to help answer any financial or investing questions you have. No strings attached. Just click here to submit your question today.