Life after divorce can be challenging for those over 50, especially women baby boomers who paused or ended their careers to stay home and raise the children or care for others. While that job could be just as demanding and meaningful as any other, it came without a salary.
But despite the financial challenges of getting a divorce, it’s possible to achieve economic stability as a single person. The key is understanding your financial situation before finalizing the divorce, the opportunities for future income and building a monthly budget to know where you stand.
Preparation and organization are essential
The U.S. Government Accountability Office published a study showing a man’s standard of living drops, on average, by 21% after a gray divorce. For women, that decrease is 41% to 45%. Getting knowledgeable legal guidance is advisable to get an accurate picture of your share of the marital estate, along with whether you qualify for spousal support and how much. Besides working with an experienced lawyer, here are other ways to prepare:
Before the divorce: List all your assets, debts and expenses. For some, looking at the last six months of credit card statements can be a good barometer for separating essential expenses from discretionary spending. If you own a house, know how much equity you have or what you owe on your mortgage. Once you gather this information, your attorney can help you determine a fair division of marital assets and debts.
After the divorce: Your plan should include whether you can afford remaining in the marital home or whether you need to downsize. If you decide to return to or continue your career, look for ways to maximize your income so you know where you stand and what you can afford. One way to help you start on solid footing is to address and pay off any marital debt, if possible, before the divorce.
Remember that you are not alone
Start building a rainy day fund once the possibility of divorce emerges. Divorce after 50 can be challenging, but with the proper planning, financial stability can be a reality. Besides working with professionals who prioritize your interests, let your family and others who love you help with the transition. Focus on living a happier and healthier life, not just surviving.