A Practical Approach for a Challenging Life Transition
No matter what circumstances lead to the decision, divorce is never an easy experience. Aside from the emotional and mental impact, it also brings financial challenges that a couple may have never even considered. You will need to determine who gets what as you divide your assets – from the car to the house and everything in between. But did you know retirement benefits are also part of the mix? These can be especially important to a spouse who worked in the home or supported their partner as they pursued an education and then a career. Read on for more important considerations for finding financial security after divorce.
Tip 1: Update Your Paperwork
Now that you are no longer married, you need to reassess your important paperwork, including life insurance, retirement accounts, and more. Be sure your ex is no longer listed as a beneficiary and appoint someone else who you would prefer to receive those benefits.
Tip 2: Envision an Independent Future
Spend some time imagining what you want your future to look like, especially your life after retirement. When do you hope to retire and how much will you need to have saved to support those retirement goals? Will you be able to retire at 65 and immediately begin collecting Social Security, or will you need to wait until you reach 67? Will you be able to delay taking Social Security and increase your eventual monthly benefit? All of these factors will play into your financial planning.
Tip 3: Watch Out for Scams
Part of being responsible for your own finances and finding financial security after divorce is protecting yourself from bad actors. In this digital age, scam artists have gotten more sophisticated than ever, so you need to be vigilant when it comes to protecting your data and financial security. Divorced individuals can be especially targeted, so learn how to recognize scams and proceed with caution.
Tip 4: Work with a Financial Advisor Who Understands Divorce
As mentioned earlier, divorce is complicated. A divorced person has specific financial needs and concerns that vary from those of a single or married person. As you sort through your finances, it can be helpful to lean on a financial advisor who has experience in working with divorced clients to avoid unexpected issues as you undergo this financial and life transition.
Tip 5: Consider a Second Act
If you used to view retirement as the time when you and your spouse took up new hobbies or traveled the world, remember that you can still have a meaningful and enjoyable retirement as a divorced person. Of course, your golden years don’t have to be spent sitting around all day, every day. You can find an encore career that leverages your skills and experience and provides a source of income, too. Perhaps it’s your chance to start that business you’ve always dreamed of or work for a nonprofit with a cause that’s close to your heart. While it may seem daunting, starting an encore career can be exhilarating. In addition to supplemental income, a second career can also offer meaning and purpose.
Tip 6: Explore At-Home Jobs
You don’t even need to leave the house to work these days. No need to battle traffic or deal with a lengthy commute. You can just head to your home office, kitchen table, or living room sofa and open your computer to get started. There are plenty of flexible, work-from-home options, and bringing in a little extra money is a great way to increase your financial security after divorce.
Tip 7: Max Out Your Retirement Accounts
If you are 50 years old or older, be sure that you are depositing the maximum amount allowed into your retirement accounts. This is especially important if you were relying on your ex’s retirement funds in addition to your own or if you are trying to catch up on underfunded accounts. If you aren’t 50 yet, you should still be saving for the future. Put aside as much as you can afford into your retirement accounts each month.
Do You Need Assistance Finding Financial Security After Divorce?
Navigating a divorce can feel overwhelming and isolating – and the financial aspects can be complex – but you don’t have to go it alone. If you consider the tips above, you can put the ones that work for you into action. When you are struggling, reach out to family and friends who can offer support or act as a sounding board. And when you’re ready to tackle your financial situation, find a partner who can help you develop a plan customized for your new life.
At Arbor, our team is focused on partnering with clients through all of the ups and downs of life. From new babies to divorce, to retirement, we provide the financial expertise you need during life transitions to help you set and achieve your goals. Whether you are recently divorced, in the process, or facing the possibility, we can help you find the solid financial ground again. If you would like to learn more about our services, please reach out to us today.