How Divorce Affects Your Retirement Finances

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Census statistics show that aging baby boomers, particularly those aged 65 and above, are twice as likely to divorce their partners compared to married seniors from 30 years ago. Divorce can have a huge impact on your retirement funds, which means that there are many considerations you need to take into account if this happens. For instance, older divorcees who are still too young to qualify for Medicare will need individual health insurance policies. If you're no longer covered by the policy of your ex-husband or wife, you will need car insurance if you drive, and have to pay higher rates for this type of coverage. There are other financial matters you need to think about as well, especially as many seniors have diminished earning capacity, making it necessary to ensure that whatever assets you receive from your settlement are enough for your retirement.

Affluent families tend towards "gray divorces," usually if both partners are financial independent. Even if this is the case, seniors who no longer work and receive steady paychecks need to document and assess their current lifestyles to identify the assets that can maintain their way of living. One partner, typically the wife, may receive maintenance (yet it may not be enough). Elderly divorcees should have funds for maintenance, as well as assets that may be split between the two to generate income. This income may come from bonds and stocks and other income-generating tools, or retirement plans.

Any assets obtained within the duration of the marriage will be split equally, financial planners advise. Although this may seem like a good enough deal, many divorced women do wrong by jumping at the chance to get the former family home. This can be tempting if the mortgage payments are done, but taking the house may cause you to lose income-generating assets which are usually more profitable for the long term. Homes are also expensive to maintain, and you'll have to pay taxes and insurance. Experts recommend placing the property into a pool of assets and putting it up for sale.

About the Author:
Carina Smith is an author who specializes in financial topics concerning seniors. Puritan Financial Group specializes in helping seniors find additional sources of reliable income when Social Security just won't cut it. For more information about how Puritan Financial Group can help you, please visit our website at http://www.puritanlife.com



Article Originally Published On: http://www.articlesnatch.com


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