Saving enough money for retirement can be a challenge even for two-income couples. However, if you divorce, your retirement savings may be thrown into turmoil. Having to maintain your own home and pay for expenses as a single person can cut into the amount that you’re able to set aside in your 401(k) or other retirement plan.
It’s a good idea to get a financial advisor both during and after the divorce to help ensure that retirement assets are divided appropriately and that you keep your savings goals on track after your divorce.
Look at your retirement savings after the divorce is over. Calculate how they will grow given varying investment strategies. There are a number of online calculators available to help with that.
When determining whether you’re on track for retirement, you should look at your Social Security benefits. If you and your spouse were married for at least 10 years and you don’t remarry, you may be entitled to some of your ex-spouse’s benefits. It’s best not to take your benefits any sooner than you have to, though.
You may need to reset your financial priorities after your divorce. This may involve cutting back on some expenditures to help ensure that you continue to save. This involves making a budget and sticking to it. Track all of your expenses diligently to determine where you can cut back.
Going through a divorce can be a highly emotional and unsettling experience. However, it’s essential not to neglect your financial well-being any more than your emotional or physical well-being. By having experienced legal and financial advisors on your side, you can help ensure that people are looking out for your interests even if you aren’t.
Source: The Logan Daily News, “Personal Finance: Resetting your retirement after divorce,” Jason Alderman, April. 14, 2015