The average age of divorce is changing and a “steady rise in the divorce rates for the over-55s” has given rise to a new term “grey divorce”. While this news is not all doom and gloom – some finding divorce leads to increased happiness – it does show “ that there are negative financial consequences of divorce in older age…” With divorce rates for the over 50’s doubling between 1981 and 2001, it is an increasing area of concern financially and in retirement.
In my recent blog 7 Steps to Retirement, I highlighted that a large percentage of Australians are not prepared for retirement. Add the cost of getting divorced later in life, and you have a severe impact on your retirement planning goals. Consider your:
- Best income earning years may well be behind you due to changes in technology or physical limitations;
- Limitations on borrowing to refinance your new life;
- Less time to accumulate superannuation savings;
- Need for two of everything;
- Mental capability of returning or keeping on working;
- Legal costs associated with arriving at a financial settlement eating into retirement savings;
- Difficulty in starting a new career later in life.
One of the reasons couples divorce later in life, is that they are poorly prepared for the transition from leading a busy, active working life to the slower pace of retirement. Whilst they might be financially prepared for retirement, they can be poorly prepared, mentally and emotionally.Couples can suddenly find themselves with a lot of time on their hands and spending a lot more time together. Whilst one of the partners may have been leading an active and fulfilling life, the retiring partner is suddenly at home with them and demanding a lot more of their time and attention.A way to help avoid “grey divorce” and achieve your retirement planning goals is to prepare a Personal Transition Plan. A Personal Transition Plan will help ensure you are emotionally and mentally prepared for retirement by:
- Reviewing your values and helping you work out what is really important to you;
- Exploring all your future plans including hobbies, physical pursuits, social activities, volunteering and philanthropy to ease you into a slower pace;
- Providing a decision making approach enabling you to make decisions about your future in a strategic and logical manner;
- Allowing you and your partner to create a vision for your new life;
- Including a step by step action plan for implementing your new life.
To establish your retirement planning goals and discuss your own Personal Transition Plan, please contact me at Everblue Consulting on 0499976058.
Disclaimers & Disclosures
Geoff Ivanac is a Sub-Authorised Representative (No. 000309751) of Barsden Private Wealth Pty Ltd ATF The BPW Trust (ABN 41 153 930 799) trading as Barsden Private Wealth. Barsden Private Wealth is a Corporate Authorised Representative No.416315 of BPW Licensee Services Pty Ltd (AFSL 484 198).
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