Divorcing later in life can be frightening because of the impact it can have on your retirement plans. You have spent years putting away money and now you may lose a large portion to your spouse or you will lose the income of your spouse you had counted on for your retirement. So if you are early in the divorce stage, it may benefit you to adjust your retirement strategy.
Dealing with the impact of divorce on your retirement plans is not likely to be easy, but as The Motley Fool explains, there are some steps you could take to improve the chances of meeting your retirement goals in spite of the disruptions caused by divorce.
Figure Out Your Share of Retirement Assets
There are some retirement assets you might acquire from the divorce. If your spouse has put away money in a retirement account during your marriage, you may have an entitlement to some of it. You might also get some of your spouse’s pension. Some of these accounts will need a QDRO to divide up. You will want to resolve these questions as early as you can so you can include them in the final divorce settlement.
See if You Qualify for Social Security Benefits
The length of your marriage can help you when it comes to claiming Social Security benefits on your spouse’s work record. If your marriage has lasted at least 10 years, you have eligibility to claim these benefits, provided you have not gotten remarried and that your spouse is eligible for disability or retirement benefits. In addition, the benefits you seek from your spouse’s record must be more than the benefits you could receive from your own work record.
Compose a New Retirement Plan
Your divorce is bound to up-end much of your retirement strategy. If you do not end up with the marital home, you may have to buy a new residence. You will also have to pay for food and shelter needs on your own without relying on your spouse’s income. There are also home maintenance costs to consider if you own your own house.
Consider putting together a new retirement plan that takes your post-divorce finances into account. You might factor in your diminished income by moving back to your retirement date. If you can, you could also put away more money toward retirement to make up for the money you may lose in the divorce. Another option is to look for ways to cut your living expenses, like moving into a smaller home with fewer upkeep costs.