Dreams of your retirement are likely what have kept you motivated throughout your career. The idea of enjoying a few decades of life unpunctuated by the demands of employment can help you defer small pleasures in the interest of saving money.
You and your spouse have likely cooperated for years to set aside a portion of your income with the intention of financing a comfortable retirement. Now that you find yourself considering divorce, concerns about your retirement may be one of the issues holding you back from filing and moving on with your life.
Such concerns are common, especially if you are already close to retirement age. With proper planning, you can take steps to minimize the impact that your divorce will have on your retirement.
Keep your costs low
One of the easiest ways for your divorce to burn through your retirement savings is for you and your ex to fight about property division and spousal support in family court.
If the two of you can negotiate an uncontested settlement, the total cost to divorce will be far lower and will therefore have less of an impact on your assets.
Know what you have the right to claim
Even if retirement benefits are not in your name, you likely have a right to receive your fair share of the retirement savings accumulated during your marriage in your divorce. You can divide retirement accounts and pensions using qualified domestic relations orders (QDRO) that eliminate the possibility of early withdrawal penalties.
You can also potentially claim supplemental Social Security retirement benefits if you are the lower-earning spouse or you were a stay-at-home spouse during your marriage.
Reevaluate your plans
Your retirement plans may have included a big vacation every year or maintaining your primary residence and a vacation home indefinitely. Such expectations may not be realistic when the same savings have to support two separate households. Scaling back your travel plans or continuing to work part-time for a few extra years can help ensure your comfort during retirement even if you divorce very close to retirement age.
Keeping your focus on the long-term impact of your divorce on your future can benefit you as you prepare for a gray divorce.