Start a new chapter of your life by avoiding these money mistakes for getting a divorce in your 50s.
Divorce is never easy, especially when it happens later in life. For many couples in their 50s, financial regrets can weigh heavily after the dust has settled. Having worked with individuals and couples in this space for many years, I’ve seen first-hand the common financial pitfalls that couples over 50 encounter during and after a divorce.
Divorce after 50 can be a new chapter in life, but it’s vital to ensure your financial wellbeing is protected. So, here are the three biggest money regrets they often share:
1. Not Planning for Retirement Separation
One of the most significant regrets for divorcing couples in their 50s is the failure to plan adequately for their individual retirements. Many couples pool their superannuation and investments, assuming they will be together for the long haul. But when divorce happens, splitting these assets can leave both parties with far less than they expected.
Suddenly, one or both parties may need to return to the workforce or delay their retirement plans. The lesson here is to review your superannuation and retirement savings as early as possible if divorce is on the horizon. Seek professional advice to ensure you both understand what the financial future holds for each of you individually.
2. Underestimating the Costs of Divorce
Divorce is costly, both emotionally and financially. Many over-50 couples regret underestimating the expenses that come with separation. Legal fees, property settlements, and the cost of setting up two households can quickly drain savings. This is often compounded by a lack of awareness around how much post-divorce living will actually cost.
While it’s natural to want to avoid thinking about this during the emotional turmoil of separation, sitting down and mapping out the financial implications is crucial. Work with a financial adviser to get a clear picture of the costs involved and how to prepare for them. Also, consider alternative dispute resolution options like mediation, which can help avoid the significant legal costs of a drawn-out court battle.
3. Not Seeking Financial Advice Early Enough
The third regret many couples share is not seeking financial advice early in the process. Divorce can lead to emotional decisions about money that are not always in your best financial interest. Dividing assets such as property, superannuation, and savings can become contentious, but getting advice from a financial adviser can help you make informed choices.
A financial adviser can provide clarity on how to structure your finances post-divorce, what tax implications to consider, and how to rebuild your wealth for the future. Many super funds also offer free advice services to their members, so check if this is an option before making big financial decisions.
For more money tips, here is everything you need to Know About Money Before Getting Divorced. And as you enter your silver years, start planning your children’s financial future with the Top 3 Things to Know When Leaving Your Kids an Early Inheritance.
