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Mid-Life Divorce – Challenges and Opportunities Through a Difficult TransitionSubmitted by Flourish Wealth Management on June 6th, 2017
By: Kathleen Longo, CFP®, CAP®, CDFA
In recent years the number of people getting divorced in their fifties and later has been climbing—rather steeply. According to a recent study, one in four divorces are initiated by couples over the age 50.[i]
If a divorce occurs close to retirement it can be incredibly challenging to recover from a loss of assets and, according to Susan Brown, author of Gray Divorce: A Growing Risk Regardless of Class or Education, a study on the rising rates of divorce among older generations, older divorcees have only one fifth of the wealth than those who stay together have. Finding ways to end a mid-life marriage that will not substantially reduce your net worth is critical to having financial stability after your divorce is finalized.
A divorce means change in virtually every way and unfortunately, for most people, it requires some paring down in lifestyle. Divorcees end up with two mobile phone plans, two insurance premiums, two utility bills, two homes and barely half of the income to pay for it all.
It can be challenging and a bit lonely to find yourself, expand your social circle, manage the financial and practical burdens and maintain a positive attitude through this type of transition. For women it can be more challenging than for men. In her study, Susan Brown found that a women’s standard of living can drop almost 27 percent while a man’s tends to increase by nearly 10 percent.[ii] There can be several factors that contribute to this statistic including having lost important years of career growth, making it difficult to get back into the workforce.
Divorce is not something that should be jumped into head first without advanced planning and careful consideration if at all possible. It will benefit your financial and emotional well-being in the long run if you are prepared for what can and may happen in the course of the divorce process and in the aftermath. Considering the following issues prior to and during your divorce can help you manage the challenges you may be faced with.
Keep records and plan ahead. Divorce can be a complicated process and it can be beneficial to consult with legal and financial professionals before you announce your intentions. You will need to have copies of tax returns, wills, trusts, financial statements, insurance policies and deeds to real property. All of these items will be necessary to determine how the finances will be divided and in what manner. Depending on how amicable your relationship is with your ex, these may be easy or difficult to retrieve after you are living apart.
Be assertive and aware. Though it is important not to let heightened emotions get the better of you, it is also important to ensure that you get what you need and deserve out of the dissolution of your marriage. Having the means to take care of yourself, prepare for the next chapter of your life, and maintain a comparable standard of living is not vengeful, it is necessary and important. Part of this requires having a healthy sense of control over the process, taking part in the negotiations and not being a passive observer of your divorce.
Engage in the present and try not to hold too hard to the past. There is an overwhelming rollercoaster of emotions that comes with divorce. It is not just suffered by those who did not initiate. Initiators, mutual deciders and non-initiators alike struggle with how to cope with divorce. Maintaining a strong connection with being in the current moment can help you manage feelings of anger, resentment, sadness and loss.
Mindfulness can help a great deal with helping your subconscious begin to let go of hard feelings and begin approaching life with a fresh perspective and a “you” rather than a “we” mentality. Shedding the concept of thinking about everything in terms of “we” can be a struggle and can conjure feelings of loss and grief. Having a good system of support among family and friends can help you to manage those feelings and channel them into new and more positive experiences with others in your life who love and care for you.
Divorce is not easy and it doesn’t come with a how to manual. Each couple who comes to the crossroads of their marriage and chooses to part ways has a unique story, unique emotions and unique financial situation. What is right for one couple may not make a bit of sense for another. The tie that binds, however, is that those who have done a small amount of advanced planning and who do not let their emotions drive the terms and conditions of their divorce usually fair better than those on the other side of that coin. Talking to a financial advisor who can help you get a clear picture of the impact that a divorce will have on your taxes, Social Security, insurances, living expenses and overall wealth can help you hope for the best, plan for the worst and keep a positive outlook on the next chapter of your life.