Kathryn, 57, finds herself single after nearly 30 years of marriage with only $18,000 saved for retirement.
Why it matters: Divorce can significantly impact finances, especially for those close to or already in retirement. Rebuilding a retirement fund later in life isn’t easy, but it is feasible.
The details:
- Kathryn’s situation underscores a rising trend known as gray divorce, which involves couples over 50 choosing to go their separate ways.
- In 2019, 36% of people getting divorced were aged 50 and up.
- Kathryn must consider all potential sources of retirement income, including access to her ex-spouse’s retirement plans, alimony or spousal maintenance, and Social Security benefits.
- While a decade isn’t a lot of time, Kathryn can take steps to build her savings by maximizing available retirement assets, increasing her savings rate, delaying retirement, and downsizing living expenses.
Given the complexity of her situation, consulting a financial advisor could be beneficial for Kathryn. An advisor can help model various financial scenarios and develop a personalized retirement plan.
The bottom line: Kathryn’s position is not unique, but with careful planning and resource management, she can still secure a stable retirement. Prioritizing savings, considering all potential income sources, and possibly adjusting her retirement timeline can help her regain financial stability.
