Divorce is stressful at any age. However, for older people who are close to retirement, it has different challenges than younger divorces. Since many old marriages end in divorce, people with their retirement close by can face new money situations if the money is not managed properly. Divorce brings multiple challenges to retirement savings.
In such cases, the Turco Legal, P.C. team helps you sort out your financial legalities after and during the divorce. However, you must know about things like how individuals can successfully plan out their life after divorce in old age.
How should individuals start after facing divorce later in life?
Life after retirement comes with many challenges, but following the tips below can help you have a stable life after getting a divorce during your retirement years.
- Figure out how much money you need for retirement.
The first thing you need to take care of after a divorce in old age is figuring out how much you need for retirement. You must think about things like the retirement money you got in the divorce, your current income, costs and savings, your age, and your desired lifestyle in retirement. This helps you find the total target amount to save.
- Look at your options for retirement savings.
After you know your retirement savings goal, the next step is choosing where to put the money. If you can join a 401(k) plan or other retirement plan at work, especially with a company match, that may be a good choice.
Additionally, a few other good options are Traditional or Roth IRAs. Both of these options give tax advantages, which helps you in the case when your taxes go up after the divorce.
- Plan for health care costs in retirement.
Medical costs can take a lot of money as you get older. Medicare helps pay for some costs if you’re over 65. However, Medicare insurance does not cover long-term care; therefore, you must invest in saving your health care after retirement to avoid falling short of money for medical expenses.
- Consider other assets besides retirement accounts.
Having other assets besides your retirement account does not replace having retirement savings, but it can add to your savings.
Think about when you will start getting Social Security. You can get benefits as early as 62. However, the full retirement age is longer for many people. So, keeping other assets as a safety option will help you be ready before you retire from your job.
