Without proper planning, retirement funds could be compromised by late divorce
Divorce is becoming increasingly prevalent among Canadian seniors and with the rise of such ‘grey divorces’ come unique financial considerations. While younger divorcing couples may have concerns about issues such as child support, older couples are more likely to be concerned about how a divorce will affect their retirement plans and the division of marital property. According to the Toronto Sun, 80 percent of older couples who divorce end up delaying their retirement. However, with proper financial and legal planning, retirement funds can be protected from the unforeseen consequences of a grey divorce.
Retirement funds threatened
In many cases, according to the Globe and Mail, one of the parties to a grey divorce has spent most of his or her marriage taking care of the home and family while the other spouse has dealt with the finances. When a marriage ends late in life, such people often find themselves without skill sets to find a new job and without enough time to build up their own savings.
Additionally, even people who have worked and saved for retirement may find that they have to postpone their retirement plans due to a costly divorce because they failed to adequately prepare for the legal challenges posed by a divorce. The other spouse, for example, may be entitled to a significant share of the spouse’s retirement funds.
Preparing for grey divorce
Spouses that are considering going through a divorce later in life should plan for any financial and legal repercussions as soon as possible. For example, Canada Pension Plan credits are usually eligible to be split between both spouses, thus helping each spouse better plan for retirement.
Experts recommend working with a financial advisor to determine what the best course of action would be when dealing with the financial side of divorce. This advice is especially important for spouses who have primarily relied on the other spouse to take care of money matters during the relationship. In addition, people divorcing later in life are far likelier to be on fixed incomes and thus must rely much more heavily on a favourable divorce settlement to ensure a secure retirement.
Need for legal advice
Just as important as financial advice, however, is qualified legal advice. In fact, wise financial decisions related to divorce often overlap with the legal side of divorce matters. A qualified family lawyer can advise clients about what their rights are when it comes to dividing marital property during a grey divorce.
Doing a divorce the right way is particularly important for older individuals since the financial stakes are often so high. For this reason, divorcing spouses should contact a highly experienced divorce lawyer to discuss what legal and financial options are available to more easily enjoy one’s golden years.