Asset Protection for Boomers: Could a Divorce Wreck Your Retirement?

8:36 pm Retirement Planning

divorce split couple 150x150 Asset Protection for Boomers: Could a Divorce Wreck Your Retirement?An article in today’s USA TODAY reports on a growing phenomenon that has the potential to wreck many retirement plans:  divorce after 50.

Boomers are divorcing more than any other previous generation and the article cites two likely factors:  boomers are living longer and many are experiencing what researchers have called a “second mid-life crisis”; in addition, boomers grew up as children of divorce, so the stigma that was historically attached to divorce doesn’t come into play for most boomers.

The fact is, if you divorce late in life, the retirement savings you were both planning to last you the rest of your lives now has to be split in two, and support two people living in two different places.  This can be ruinous to any retirement nest egg.

Some recommendations for those who experience a later-life divorce and still hope to retire one day include:

Get a financial adviser to work with your divorce lawyer on a settlement that can be the foundation for your separate retirement.  Work out a plan that takes your new economic reality into consideration.

Realize that if you divorce in your 50s, you still have at least a couple of decades to rebuild your retirement savings, so don’t panic and put off the planning.

Increase your savings and reduce your spending.  Consider renting instead of buying a new place and readjust your lifestyle, cutting back on things like dining out and travel.

Stop supporting adult children.  For most boomers who divorce, it is not possible to keep sending money to adult children and still build a healthy retirement portfolio. Help is available to you by contacting your Southern California financial planning experts today.

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