Planning Your Retirement After Divorce

Planning Your Retirement After Divorce

When divorce and retirement occur within a few years of one another, the experience can be doubly disorienting. It generally means making big changes to retirement plans you may have had in place for decades. This is partly because you will not be spending your retirement years with the person you assumed you would spend them with and partly because your financial situation may have changed. Despite the stress and upheaval this causes, you can still have a happy retirement following a divorce.

Take a Breath

The first thing you should do is slow down. People often say that making any major life decisions in the wake of grief is one of the worst things you can do when grieving loss or death, and divorce can feel very much like a death. Take a year or at least a few months to get your bearings and really explore all of your options, which are almost certainly more varied than you think.

Look at Your Assets

Divorce can introduce a lot of variables into your retirement planning. You might have had to split a retirement account. You may be receiving spousal support payments temporarily or permanently, or you may have to make those payments yourself. You might have gained or lost some other assets as well. For example, you might now be the sole owner of the family home, or your spouse might have bought you out. If one or both of you had a life insurance policy with cash value, this was probably included in the divorce agreement. You could look into a life settlement to get that cash now. You can read more about how sale to a third party would affect taxation. Once you have a good look at your assets, you can start to think about what your retirement years will look like.

Consider Your Options

Retirement doesn’t mean sitting around at home and getting sedentary. Of course, if you want, you can remain in your community and spend most of your time with your family. This can be a rewarding way to spend these years. However, there are many other options as well. If you’re concerned about finances after the divorce, you might be able to pick up some part-time work. Some people choose to work simply because they enjoy it. You might want to start a business, seek out ideal jobs for seniors after retirement, or take up volunteer work. Retired people may also devote their lives to traveling far more than they were able to when they were working full time. There are tours that specifically cater to retired people, but you can travel on your own as well.

Taking classes is another option. At some universities, older adults get reduced fees or can attend for free. If you’ve always enjoyed being active, retirement is no reason to stop. Many older people continue to run marathons, cycle and participate in other active sports as they age. You might also want to think about whether you wish to stay where you are or move. This could be to a smaller place within your city or it could be to another state or even another country. Some retirees prefer to move someplace warm with a lower cost of living.

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