11 Jan Retiring and Divorcing at the same time?

Thought your retirement would be like this?

Thought your retirement would be like this?

But instead it turned out more like this?

But instead it turned out more like this?

The baby-boom generation is showing that it ‘s never too late to consider divorce.  As our life span extends,  people in their fifties and sixties with better health expectations figure they have a number of good years left. Why not live them to the fullest?  That may mean ending their long term marriage and going it alone.

The problem with getting divorced late in life, is that most people find it hard enough to save for retirement and don’t imagine living off of just half of their savings, whatever they may be.

If a couple had money in the marriage, there may be enough  money to go around after divorce.  The challenge is for normal middle-class couples who just scraped by.  Or those couples who lived beyond their means.  When they try to make their house and retirement assets cover two households instead of one, there’s simply not enough to go around.  And they’re not likely to go back to work.  They may be expecting to do the things they never allowed themselves to do while they were married like join a club, travel etc.

When people are relying on a pension or savings, there’s never going to be enough to duplicate the marital lifestyle.  If you’re divorcing at  55 or 60, it may be too late to go back to work or  too late to recover financially.

If you didn’t consider that divorce would be par t of your  retirement plan,  you may want to  work with a divorce team that consists of  both legal and financial professionals. They are there to help you navigate this difficult time, both in a legal and financial capacity.

Image courtesy of Ambro at FreeDigitalPhotos.net <http://www.freedigitalphotos.net

01 Jun Financial Homework in Grey Divorce

When you’re considering divorce in your 50’s,    a big concern is the financial impact for you and your spouse at this stage of your lives.  If you delayed having children, they may be young and child support payments may derail retirement plans/savings. You may still be faced with funding post secondary education. You may be supporting aging parents. One spouse may already be retired.

Part of divorce is dissolving your family’s joint financial relationship. This can’t be done unless you know the total financial picture. All the facts need to be on the table so you can determine how best to separate your finances allowing both of you to make the best choices of how you will move forward on your own.

This means doing some homework in advance.  As a start, you need to find and prepare the following documents:

  • Tax returns from most recent tax years
  • Recent paystubs that show payroll deductions
  • List of personal property  such as cars, boats, valuable art, jewellery, antiques
  • Recent statement from Assets:
    • Bank accounts
    • Investment accounts including open, RRSP, RRIF accounts
    • Education savings Accounts
    • Other assets such as Stock options, other Company awards
    • Company Pension
  • Recent statements of Debts: Mortgage, Line of Credit both personal and joint, Car loans
  • Miscellaneous Info: Life insurance, Medical benefit plans
  • Business Ownership details

Doing your homework takes time.  Documents may be hard to locate. You may have to request copies from the bank or your employer. You may not have looked at some of these documents for a very long time.

You can hire a divorce financial professional to “tutor” you with your homework. They can help explain and organize it all so everyone is ready to start.

23 Apr DIVORCE AFTER 50- THE BENEFITS OF MEDIATION

The closer retirement, the more important it is to manage resources.  It takes a lifetime of planning for the years when more monies will go out than will be earned.

For most couples, their plans for retirement are meshed.  When kids are young, there are often dreams about what an empty nest will feel like.  When it finally comes, thoughts often move ahead to the time when leisure will dominate.

No couple plans for a divorce.  They are too busy working, saving, managing the household and just living life.  But recent statistics show that separation and divorce is growing more quickly among mature couples.  There are many theories, including the one that says the “baby boomers” are a generation that feels a strong entitlement to their lifestyle choices.  This is the generation that is now spiking divorce rates.

The math is simple the closer you are to retirement.  There is less time to save and a longer time to spend.  Preserving the nest egg means splitting it up in a way that will bring the most benefit to each person.  And spending it on a fight means less for everyone.

Mediation is a very useful process when maintaining resources is paramount.  Here are some good reasons for engaging a good mediator to help you work out your separation agreement:

  • It is better for your kids (imagine how hard it is for grown kids to see their family change)
  • It is your process and you can control cost and timelines
  • It is confidential
  • It gives you the chance to leave the process with an ongoing relationship to maintain a healthy family
  • The mediator along with a financial partner will make sure you understand what your financial future looks like and will offer you the opportunity to make market adjustments as necessary
  • You will be given the opportunity to work on your future, not to fight about your past
  • Mediation has been around for decades and has a proven track record of success
  • It is something you can both agree on

26 Jan Are you Financially Prepared for Divorce?

“Why didn’t I pay more attention to our family finances?”

I frequently hear this from women who find themselves facing divorce.  This is the time for women to start to make constructive and knowledgeable decisions about their money and their future. It’s never too late to get started.

Here are some steps you can take to get financial prepared for your divorce. (Frankly it’s good advice even if you aren’t facing divorce)

Pay Attention to the Household Finances
You should attend meetings with insurance agents, accountants, financial planners and lawyers. You should also look over monthly bank statements and credit-card bills. Ask about your husband’s company benefits including bonuses, other “perks”,  company pensions, and other savings  plans, etc. Keep a list of all bank and brokerage accounts and insurance policies.

Don’t lose your Financial Identity
You always want to maintain your own credit identity. Check if your credit cards are in your own name or if you are simply an authorized user as a lack of credit history can work against you.  You should have three bank accounts (his, hers and ours) and maintain separate credit cards.

Keep Your Skills Fresh
While you might welcome the chance to stay home with your kids, the longer you’re out of the work force, the harder it can be to jump back in. Women often face lowball wages or lower job titles when they try to return to work after a long hiatus.

Save for Retirement
Many married women don’t make retirement-saving a priority. If the husband is the primary wage earner, the wife often trusts her spouse to save enough for their collective golden years. A woman spending her retirement savings, (sometime all on legal fees),   is particularly distressing considering that women, on average, live six years longer than men.

Get Financial Guidance
When women are going through a divorce, they need to determine which assets will help them pay their bills and reach their long-term goals. Too many women fight for the home to avoid uprooting their children, only to find that they don’t have the cash flow to pay for it.

Divorce is not only the end of a marriage but it is the breakup of an economic unit. Financial awareness will go a long way to help you feel more in control and better equipped to make reasoned decisions.