As the divorce rate in the United States and abroad continues to be on the rise for Baby Boomers and older individuals. The increase in the “grey divorce” statistics doesn’t appear to be slowing and the reasons are varied including:
- We’re living longer
- Divorce is more socially acceptable
- Women are or have been, becoming more financially independent
Women in long-term marriages are being faced with unique financial situations when being faced with divorce. The financial concerns that face younger women are unique to that age group as are the financial concerns facing “grey” women.
As a divorce financial planner who works with women at all stages of their lives, I urge women to take charge of their own financial future. From the day they say “I do” they should have their own bank accounts, credit cards in their name, have an understanding and take part in the family finances and know where financial paperwork is filed and where the bank accounts are.
Unique financial considerations for women facing a grey divorce
For a woman who is self-employed, a divorce at any stage can set the stage for the ruin of the business. To avoid that happening, you need to speak with an attorney to take the appropriate steps to divorce-proof your business. This should be something you should do prior to your marriage.
How can a divorce destroy your business? If you started out on a shoestring and have built it up to a business that has increased in value and in assets during the course of the marriage, it could be considered “marital assets” and you may be forced to buy our your spouse’s share or you may need to liquidate assets in order to make a payment to a spouse. If the business represents the majority of your marital assets you may be forced to sell the business and divide the proceeds.
Your retirement funds.
When you divorce there will be a scrutiny of the retirement accounts that you and your spouse have. These include 401(k), IRAs, pension accounts and any others. In the settlement you need to clearly spell out who owns these assets and how they will be distributed during the proceedings. There are many factors that will determine how these assets will need to be distributed.
If your spouse carried the cost of health insurance for you and the family, who will pay for your health insurance once the divorce is final? You will not only need to find health insurance, but you will also want to look into life insurance, auto insurance, property insurance for the home you’re living in or if you move into an apartment. Understand what these insurance policies will cost so you can begin saving for the premiums.
Prior to your divorce, chances are you lived a relatively stable financial life. Now that you’re on your own, how can you assure you are financially stable in both the short- and the long-term? Work with a divorce mediator who can help you budget for your living expenses following the divorce. Look for an individual who understands the importance of gaining an understanding of your financial goals and help you come up with a values-based budget. Knowing what you want to save for, and spend money on, and why will help you come up with a workable budget that will make you feel financially secure.
Live within your (new) means.
Once the divorce is final – actually before the divorce is final – you need to find a way to not only live without your significant other but to live within your new financial means. This might mean you don’t eat out as frequently, that you downgrade your cable channel package, that you wear your clothes for another season. Look for ways in which you can save money without feeling impoverished. Again, understanding your financial vision and goals will help you move past this feeling of fear.
Don’t isolate yourself.
It may be difficult to keep your relationships going with friends and family. You don’t want their pity. However, you do need their friendship. You will find, unfortunately, that many friends you once had will slip away, but your true friends will be by your side through the divorce and beyond. Find ways to interact with people and stay active. Don’t let financial fears keep you home at night; there are many ways to find low cost or no cost activities that get you out of the house and meeting new people.
If you’re facing a divorce, contact our office. A divorce financial planner can help you come out the other side of your grey divorce feeling more intact and hopeful about the future.