Rebuild After Divorce
People plan for retirement. They don’t generally plan for divorce. So naturally the unplanned divorce can interfere with your plans for retirement, but you can be prepared to rebuild after divorce.
While this can be a concern, there are steps you can take to alleviate the damage to your finances and retirement plans. First off, it is best to focus on the pension over the house or car. Your previous vision of retirement likely involved your spouse. However, after your marriage status changes, you will not be saving the same way as you did while in the marriage. A recent ING study found divorced individuals had an average of $10,000 less in retirement savings than married individuals 5 years younger. Women in particular struggle in these circumstances, with their household income dropping significantly more than the average for men in these situations.
How do I rebuild after divorce?
It is important to keep focus on your pension plan or 401(k) after splitting your assets. It is likely a better long-term investment. Sometimes it is even best to sell the house and split the equity. While you might be inexperienced in investing, starting simple and getting help from professional services can put you on the right track to take charge of your financial future.
Should you remarry, you can keep this money separate but must disclose the information. Prenuptial agreements are common in second marriages, but you can still be working towards mutual goals with your new spouse.
So take care of what needs to be done in the short-term for your life, your partner, and your children. But keep focus on the future and your long-term financial plans so you are able to manage your retirement with ease.