The rate of people divorcing over age 50, known as gray divorce, is increasing. This increase may not surprise you, but what may surprise you are the problems that this presents. People who are older usually have more assets to consider during the asset division of the divorce.
One of those assets is their retirement accounts, including 401ks, pensions and social security. Typically, retirement funds saved during a marriage will be considered as part of the marital assets during divorce and subject to some type of division.
So what can people do to replenish those assets if divorce partially depletes them?
Here are some possibilities for re-planning for retirement.
- Increase savings accounts — Revisit your budget and decide what changes will help you increase monthly savings. Having a percent of your paycheck funnel directly into a savings account can also make it much easier to meet savings goals.
- Change investment strategies — Maybe you should look at how and where your funds are being invested. What kind of risk level will grow your money into what you will need for retirement? Are you at the right level for your risk tolerance and comfort?
- Downsize your housing — If you are over 50 and divorcing, you may also be an empty-nester. Is this a good time to look at your living situation? If you are currently in a large house, would a condo meet your needs? Or could you downsize to a home with fewer bedrooms and bathrooms? Consider how much space you need and want to take care of.
- Refinance a mortgage — Investigate current mortgage rates. Would refinancing your home reduce your monthly payments? This could free up more cash to be added to savings or other investments for retirement planning.
These are just a few ideas to consider in replenishing retirement accounts later in life.
How would you adjust your retirement strategy?