3 Tips to Reduce Later Life Divorce from Wreaking Havoc on your Retirement Plan

By: Michelle Buonincontri, CFP®, CDFA

A laterlife divorce can wreak havoc on even the most well-thought out retirement plan -  as there is little time to amass assets and recover from the loss of previously anticipated retirement income.

"Gray" divorces — among couples 50 and up, or "Boomers" – have been on the rise, with about 25% (one in every four divorces) occurring to people over the age of 50 according to a study by the National Center for Family and Marriage Research at Bowling Green State University . It has been said that 50% of first marriages end in divorce, and the numbers are even higher for second and third marriages

So what can you do?

Manage Expectations

During this time, managing expectations is paramount. The income that once supported one household, is most likely now supporting two. A spouse may need to consider working longer (delaying retirement), modifying living expenses and discretionary spending. Many times, one spouse may be entering the workforce – either again after many years or even for the first-time. Life will be different post-divorce. This can be scary and stressful, and decisions tend to me made on emotions rather than facts. Ensure you have others in your life to help support you during this difficult time. Consider Mediation as a resolution alternative, maybe join a support group or yoga, be "mindful" of emotions, and try to keep "healing" as a central theme as you weigh choices.

Create an Asset Inventory

Unfortunately, the spouse that was non-working, “less-monied” or the care-taker - suffers the most financially in a divorce, as they have less saved for retirement. Understand that all marital assets can become "potential" retirement assets; even ambiguous employment benefits such as bonuses, stock options, deferred compensation, health benefits, the future income stream of pensions, and Health Savings Accounts (H.S.A.’s). If these assets aren't specifically identified, or you don't understand them, the success of a retirement plan may even be compromised - as there is no "re-do" in divorce.

Understand the Value of What you Are Really Entitled to

Decisions regarding the identification of marital & separate property (and their growth during the marriage), retirement asset valuation, asset division and tax implications become so important as pension benefits and social security will be less in a single household, and health-care costs may now become a concern (whereas before they may not have been due to spousal benefits). Pensions and Social Security benefits increase the likelihood of successfully meeting your needs in retirement and are considered "safer streams of income", so they are an important part of your plan after divorce. All these need to be considered in the Divorce planning process as they have a large impact on the success of your new post-divorce retirement plan.

Working with ac CDFA™ (Certified Divorce Financial Analyst) can help with understanding the short and long term cash-flow and net-worth effects of various options and settlement scenarios -  so that decisions can be made that minimize the financial impact on a retirement plan and provide longer term peace of mind.  

Both the IDFA (Institute for Divorce Financial Analysts)  and the ADFP (Association of Divorce Financial Planners) can be resources for finding a CDFA™ (Certified Divorce Financial Analyst)  professional to support you during this time of transition.

This article originally appeared on LinkedIn.


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Michelle Buonincontri is the Founder of Being Mindful in Divorce. She’s a divorced single mom, passionate about using her professional experience as a CFP® & CDFA™ and personal journey to support women in transition; creating confidence through education so they can make financial choices with peace of mind. Bringing together a background in investment management, tax prep and retirement planning, to provide Divorce planning (with singles or couples) and Financial Coaching services, financial literacy workshops and writings.

Rebuilding Your Financial Future After Divorce

By: Michelle Buonincontri, CFP®, CDFA

If you are like most, your divorce ends with debt, and the last thing we are thinking about is retirement. I know, I've been there; nothing kills a retirement plan like a divorce. There are no student loans or government bailouts to help us.

According to a report released by the National Institute on Retirement Security on March 1, 2016, 80% of women over 64 are already more likely to live an impoverished life than men.

So what’s a gal to do?

Cut Discretionary Spending

This might sound obvious, but life is not the same. The income that once supported one household may now be supporting two, and you may be entering the workforce again or for the first time. Things will need to change, and you are the catalyst for that change!

For example, renting instead of owning a home may make more sense, even if just in the interim to keep expenses down. We need to remove the emotion from our financial decisions and take a longer range view.

Take Advantage of Any Employer Retirement Match

Many employers offer workplace savings plans that match employee contributions—often up to 6% of your salary. Execute the strategy above so you may contribute enough to your tax-deferred employer plan to earn 100% of the employer match in a 401(k), 401(b) or 457 plan. Earning the match is like receiving a 100% return on your investment. Where can you find a 100% return? This will help your nest egg grow and boost your retirement security. Not contributing enough to utilize the employer match is like leaving free money on the table.

View Your Divorce Debt Like An Investment

Like a what? I know that intuitively does not make sense. But there are competing resources for paying off debt and saving. Start by comparing the interest rate on the debt to that of an expected investment return and the power of compounding of retirement savings.

If, for example, your student loan or mortgage has a before-tax interest rate of 3–5 % (which may be even less after a tax deduction) and you can reasonably earn 5% with compounding over a longer time horizon in retirement, it may make more sense to put money in your retirement account than pay off that debt early—always considering cash flow and remembering that market returns are not certain. 

But if your credit card is charging 10%, put more money there. Once you stop paying that 10% it’s like earning 10%, because it is no longer being spent and is available in your budget for other items. Look at the interest rates you are paying like market returns that are leaving your pocket, and try to consolidate debt into a lower interest rate whenever possible.

Get in Touch With Where You Are in Your Story

What is going on for you right now, in this moment? Are you living in the past with regret, bringing the past into the present, or maybe even living in the future with fear?  What messages have you taken in and believe about yourself? This can be scary. For me, being grateful for what I have, acknowledging a point of view or a set of expectations I have of a situation, or others that are coloring my perspective, is freeing. Once done, I can choose to see things differently and I can choose to take actions so that I may be the architect of my life.

When we are not blaming and we are choosing, it can be very empowering!

Yes, these are the basics. We need to lay the foundation before we can move onto planning strategies. Consult a certified financial planner for comprehensive advice on strategies that address your retirement planning needs.

This article originally appeared on Investopedia.


Michelle Buonincontri Circle Headshot.png

Michelle Buonincontri is the Founder of Being Mindful in Divorce. She’s a divorced single mom, passionate about using her professional experience as a CFP® & CDFA™ and personal journey to support women in transition; creating confidence through education so they can make financial choices with peace of mind. Bringing together a background in investment management, tax prep and retirement planning, to provide Divorce planning (with singles or couples) and Financial Coaching services, financial literacy workshops and writings.

How do you show up each day?

by Karen McMahon

A look at our emotions as Energy in Motion and how to move toward awareness, engagement and fulfillment

I used to be a pretty positive person.   But a few years into my marriage, working full time and raising two toddlers, I found myself constantly angry.  At first I was struggling through a rocky, oft-times abusive marriage and later a hostile divorce.  I was fighting with my spouse all the time; living in a house filled with stress, the kids began to act out constantly; financial fears and overall anxieties were so intense you could cut the tension with a knife.  It is no wonder I wasn’t at my best, maneuvering through my everyday challenges.

What challenges are you facing and how are you handling them?  If you are getting tired of the way you are showing up, the good news is you can do something about it.  You don’t have to approach each day with worry, anger and tension.  You don’t have to snap at people, cry at the drop of a hat and be tied into knots each time you need to make a critical decision. You can shift to a better place. But like everything, it is a process and patience is critical.

The solution is in the lens through which you view your world.  From where you stand life might look pretty grim or scary or unfair and because perception is reality, your feelings are totally understandable.  However, you can change your perspective.  Ask yourself a few key questions…

  • Is there another way to look at this situation?
  • Are there any other possibilities besides the one I am currently considering?
  • How might someone else see this situation?
  • How is my perspective serving me and what is another viewpoint I might consider?

Typically when we are in a pressure cooker like divorce, we look at the world through the eyes of a victim or a fighter.  We are either depressed or in some level of conflict.  Either of these vantage points is like standing in front of a runaway freight train.  All we see is doom and gloom.  What if you were to move to a ‘safer’ vantage point, one that served you better?

When you feel sad and hopeless or angry and fearful, you feel a heavy sensation as if you are dragging yourself through your day.  Likewise, when you experience a beautiful sunset or a wonderful night out with friends and loved ones, the feeling is calm and peace or joy and excitement.  During these times you feel a lightness of being.  The reason for the heavy and light sensation is the energy that comes with the emotions.  Emotions are simply energy in motion.

Stay tuned, I am going to look at the seven energy levels that we all reside in.  From the ‘catabolic’ life depleting energy that you experience when you are feeling like a victim or in full out conflict as mentioned above, to the move fulfilling energies in living in forgiveness, compassion, peace and joy.

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Karen McMahon

Karen McMahon, Certified Relationship & Divorce Coach & Master Energy Practitioner is the founder of KM Life Coaching and co-author of “Navigating Your Divorce: A guide to the Legal, Financial and Emotional Basics”, a free ebook. Karen’s passion is to work with men and women going through the divorce process; helping them navigate the difficulties while focusing on personal growth and embracing the opportunities that lie ahead.

The Prenup

by Stacy Francis, CFP®, CDFA

Over lattes today, my best friend reported that her friend was finally leaving the husband we all tried to tell her she never should have married in the first place. I am sure that you have a few girlfriends who you love in spite of their husband. Why do nice girls sometimes choose jerk husbands? Ok, I am digressing. This is a topic for another blog…

The friend was devastated by the divorce, my best friend told me, and her only consolidation was that she had made him sign a prenup.

We have all heard this story in one version or another. From A-list celebs to politicians and neighbors, divorces are far more common than we’d like to think they are. Conclusion: while drafting one isn’t exactly like a honeymoon trip to Maui, doing so may save you years and years of agony down the road. But what should be included in a prenup?

Put simple, the prenup should be a summary of how your assets (savings accounts, securities, houses, cars, investment properties along with anything else of monetary value) are to be allocated in case of a divorce. In the absence of a prenup, state laws will make these decisions for you. Though you may consider these laws favorable at the time of the engagement, they are ever changing, and therefore most people are better off settling things on their own. Not because lawmakers aren’t doing a good job – it’s just extremely difficult to generalize when each case is so truly unique.

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.