Older couples considering divorce after 50 may face unique challenges when planning for retirement. If you’re divorcing in your 50s or 60s, it’s important to reassess your financial plan. After years of sharing income and assets, divorced couples will have to support two households instead of one. They now have two mortgages or rent payments, two utility payments, two grocery bills and other expenses.
Divorcing later in life means that you will have fewer years of work to recoup the financial losses of divorce. Taking advantage of the catch up provisions for retirement contributions can help. In 2016, those 50 and older can save an additional $6,000 over the standard $18,000 limit for 401(k)s and an extra $1,000 in a traditional or Roth IRA beyond the normal $5,500 maximum.
If you have already retired, you may have to look at ways to stretch your retirement money by taking fewer contributions, which translates into spending less. You may want to consider returning to work on a part time basis to supplement your income. Perhaps this is not what you envisioned for your retirement, but you won’t be alone. Rejoining the workforce is a growing trend for seniors with some returning to stay busy, but many more driven by the need to supplement their income.
While divorce in all other demographics is decreasing, over-50 splits have doubled in the last 20 years, with one-quarter of all U.S. divorces involving people over 50. If you are considering divorce later in life, it is important to carefully evaluate your financial picture to make the transition smooth sailing.