What Should Women Do to Protect Their Retirement Years After Divorce?
If you are approaching retirement, you have likely spent years planning for this next phase of your life, from making regular contributions to a 401K plan or a pension plan, to adjusting your personal investments and spending habits. It is a major life change, and something worth celebrating, particularly if you are fortunate enough to be in good health as you approach your golden years. However, if you are a woman and you are divorced or you are in the process of getting a divorce, your income is likely to drop significantly more than your ex-spouse’s. In fact, according to a study by the Government Accountability Office, divorced women over the age of 50 will likely see their income drop by an average of 41 percent compared to only 23 percent for men. In order to protect your financial future as you approach retirement, you are urged to contact an experienced divorce lawyer at your earliest convenience.
Why Does Divorce Negatively Affect Women’s Retirement?
There are a number of factors that can impact your financial future as you approach your retirement years. According to Lenore Weitzman, Sociology and Law Professor at George Mason University, women typically experience a 73 percent drop in their standard of living following a divorce, whereas their male counterparts enjoy a 42 percent improved standard of living. In addition, women often see their retirement savings reduced by half after a divorce. Oftentimes, it is very difficult, if not impossible to recover those losses, since women tend to earn less than their husbands over the course of their career, and many women leave the workforce for several years to raise their family or care for a family member with health issues.
Research also suggests that divorced women are significantly less confident than married women about their financial future, and how much money they will need to save in order to maintain their current lifestyle. Ultimately, divorced women spend more time and energy worrying about whether they will have enough money for retirement, and struggle with understanding how much they will need. It is highly recommended that you take control of their financial situation and consult with a divorce lawyer who will protect your financial interests and ensure that you reach a favorable settlement agreement.
What Are Common Mistakes That Can Impact a Woman’s Retirement Years?
Despite the fact that women live three to five years longer than men, divorced women often have much less money than men as they approach their retirement years. However, by understanding some of the common mistakes that women make when it comes to planning for retirement, you can avoid some of these missteps and take control of your financial future. The following are some examples of common mistakes women make when it comes to planning for retirement:
- No clear plan in place. A successful retirement is all about proper planning. Spend some time thinking about your plan for retirement, how you plan on spending your days, whether you want to travel, get a part-time job doing something you enjoy, or if you would like to downsize and relocate to a warmer climate or to be closer to family. If you do not have a plan in place, you are more likely to be financially unprepared for this major life change.
- You have not adjusted to living on a fixed income. If you are living on monthly pension or Social Security payments, you will likely need to adjust your spending so that your money tides you over each month. This can be difficult, particularly if you are used to cost of living raises, bonuses, commissions, or other salary incentives you received when you were working. Figure out what your monthly payment is compared to what you are spending money on, and figure out what expenses you can eliminate from your budget.
- You continue to financially support your adult children. When your adult children are struggling financially, and they are having trouble paying their student loans, rent, car payment or other monthly bills, it is completely normal to want to help your children through a difficult time. However, rather than supporting them financially, offer emotional support, financial advice, and a little bit of tough love. This will help them learn how to stand on their own two feet, and you can save hundreds, if not thousands of dollars per month that you were giving to your child.
- You overuse your credit card. If you are unable to pay off your credit card bill each month, you are probably using it more than you should. Credit card debt can get out of hand very quickly. There are ways to pay down your debt, but it will take time, patience, and perseverance. In the meantime, consider leaving your credit card at home, and use cash or debit cards to pay for things.
- Cost of health insurance. Healthcare costs are by far the most significant expense for retirees. If you are fortunate enough to be able to remain on your former employer’s health plan, this will save you thousands of dollars, particularly if you start to develop health complications. However, fewer employers are offering this option. If you are under the age of 65, you may find an Affordable Car Act (ACA) policy that will work for you. If you are over the age of 65, you may enroll in Medicare, although there are a number of different plans available. A Medicare broker can help you select the best plan for you.
- Impulse buying due to boredom. If you spend a significant amount of time sitting in front of the TV, you may be more likely to purchase items from the Home Shopping Network or click ‘Add to Cart’ while surfing the Internet. This behavior can quickly become addictive, causing serious financial problems. Avoid this habit by getting out of the house, meeting up with friends, volunteering, and taking up other activities that keep you busy without spending money.
Marlton Divorce Lawyers at Goldstein & Mignogna, P.A. Negotiate Favorable Divorce Settlements for Women
If you are going through a divorce, and you have questions or concerns about your financial future, and the impact that your divorce may have on your retirement, you are urged to contact our experienced Marlton divorce lawyers at Goldstein & Mignogna, P.A. We will protect your rights and help you navigate every step of the divorce process to secure the financial settlement you deserve. To schedule a confidential consultation, call us today at 856-600-6901 or contact us online. Our team is proud to represent clients across South Jersey including Marlton, Burlington County, Camden County, Gloucester County, New Jersey.