After struggling with my finances for more time than most people realize is possible, I began thinking more seriously about what I could do to make things right. I began working hard to go through and identify challenges that I was faced with, including the fact that I had several kids that cost a lot of money. I began thinking of ways to work on saving cash, and it was really amazing to see how much of a difference something like skipping drinks with dinner and working on finding foods we could make at home could really be. I wanted to start a new website all about creating a more solid financial plan. Check out this blog.
Newly Divorced? 5 Parts Of Your Retirement Plan To Reassess
After divorce, you'll undoubtedly begin making new plans in a variety of different areas. One of these should be your retirement planning. In what areas might divorce change how you plan for retirement? Here are a few key things to look at with your financial planner.
1. Retirement and Other Assets. Most divorces include the division of marital assets, often including retirement funds. This may result in more assets than you may have had during the marriage or the loss of some retirement funds. You'll need to consider whether this new starting point puts you on the same track for retirement, behind in savings, or ahead of the game.
2. Individual Retirement Goals. As a married couple, you likely planned for retirement as a family. But now you must determine what your personal retirement goals are. Has the date changed, either forward or backward? Do you want to travel more? Or less? Is your retirement location the same or different? New goals as a single person mean new plans to reach them.
3. Social Security Changes. Divorced persons have different access to their spouse's Social Security account. You may have the choice to draw upon your spouse's Social Security instead of yours — and as early as 62 years old. This new element may affect your own savings and retirement date.
4. Savings Rates. Along with asset changes, you now have a different income level. Dual-earning families may now be single-income individuals. You might need to pay support for children or your spouse. Or your disposable income might be higher now that your spouse isn't sharing what you bring home. People who may not have been saving enough during a troubled marriage may want to ramp up contributions.
5. Investment Types. If you haven't been the primary one managing retirement funds, you now have to decide how you want to invest your own money. One marriage partner may have been willing to take on more risk than the other, for instance, or one may have different ethics about companies in which they invest. Each person now needs to find their own balance in diversification, target retirement funds, and traditional vs. alternative investments.
Clearly, you'll have a lot to consider as you chart your own path to retirement after a divorce. The best place to begin is to meet with an experienced retirement financial planner in your state. They will help you understand where you stand, what's changed, and how to reach your personal goals. Call today to make an appointment.
To learn more, contact a retirement financial planner.