No matter when a divorce happens, it poses certain financial challenges for both people once the dust settles. But women over 50 often have some unique challenges that younger women are less likely to face, especially if they have been married for some time or if they spent a significant amount of time during the marriage out of the traditional paid workforce.
If a woman had planned on retiring with her husband and suddenly is not, she’s going to have to do some serious reorganizing if she is going to remain financially secure in her older years.
If you see it coming
One of the best tools for financial security is planning ahead, and this is easier to do if you see divorce as a possibility before it actually happens. If you are one of those who can tell that divorce might be in your future, do your best to prepare yourself financially while you are still together. This means being smart about your saving, spending, and building positive credit in your own name.
Managing separate property
Assets in a marriage are comprised of marital property and separate property. Generally, the court will divide marital property according to what is equal and/or fair, and leave separate property alone. When women do inherit money or if they have money they have made on their own before their marriage, it is important to use this money to invest in themselves and their future. Any investments or purchases that you make with separate money will remain yours after the marriage. Save this for yourself. If you’re shopping for the both of you, use money that is considered marital assets.
Consider retirement benefits
Women who have established some sort of personal retirement account may think that they don’t have any claim to their spouse’s retirement income, but this might not necessarily be true. Part of the reason why divorce poses fewer financial challenges for men over 50 than women is because they tend to have more lifetime earnings. Have your lawyer explore the possibility of getting at least a portion of retirement income, especially if you were married 10 years or more.
Rethink your budget
More so that other groups, it is more likely that women over 50 will need to downsize their lifestyle after their divorce. Consider what is most important to you and prioritize accordingly. While it’s a good idea to establish credit in your own name, be sure to pay off bills right away rather than trying to maintain a standard of living you can’t afford. The stronger you are able to build up your own credit, the lower your expenses will be overall.
Preparing for divorce can be emotionally and mentally draining. Even though it can be difficult to put aside you emotions, addressing these issues now can improve the divorce process. As always, it is beneficial to consult a divorce attorney to discuss your specific concerns and plans.