Divorce after 50 is increasingly common, and neither age nor the length of your marriage should keep you from filing for or following through with a divorce you believe is necessary. That said, you should prepare for major changes to both your lifestyle and finances post-divorce, as such changes may present challenges that prove difficult to overcome if you are not ready.
Unfortunately, the truth is that if you decide to divorce after 50, you have less time to try to reaccumulate the wealth you lost in divorce. To preserve your pre-divorce wealth and protect yourself from financial disaster, Kiplinger shares a few tips for how to prepare financially pre- and post-separation.
Go over your finances
First and foremost, it is important that you determine how much in both assets and liabilities you and your spouse have together. Gather any and all documentation you can find that pertain to your finances. In addition to bank account statements and credit card statements, collect documentation for your retirement accounts, life insurance policies, car loans, deferred compensation plans, profit and loss statements for a rental home, mortgage statements and stock options, among others. Bring them to your lawyer, who can help you review them and estimate how much you can expect to walk away with.
Create a new budget
In your post-divorce life, you will have to double your financial contribution to your household but on half the income. It is crucial that you understand just what your new lifestyle can support and budget accordingly. Major costs to consider when creating your new financial plan include house payments, car payments, insurance premiums, food and clothing. When budgeting, leave a substantial cushion for unexpected expenses and temporarily put off major purchases, such as new furniture. Also, budget a large portion of your income toward savings.
Consider downsizing
Sure, you may be able to maintain the payments on your $750,000-dollar marital home post-divorce, but is doing so practical? If staying in your current home will cause you financial stress in other areas of your life — such as by affecting your ability to buy groceries or pay your utility bills — it makes little sense to keep holding on. Free up some income by downsizing to a home that is worth three-quarters to half of your current home.
Develop a financial master plan
Your post-divorce goals for retirement may look drastically different than your marital goals. As you prepare for divorce, determine what you want to do in your newly single life. Do you want to travel more? Retire sooner? Start a new business? Estimate how much you will need to make your goals a reality and set aside money each month to work toward them.
Divorce comes with several challenges regardless of at what age you decide to file. Fortunately, you do not have to attempt to overcome those challenges on your own.