For decades, you have saved and invested wisely. As you a result, you do not expect to see any shortfall in your retirement savings. A comfortable retirement is foreseen. At least it was until your spouse decided to seek a divorce.
How will divorce affect your retirement plans? If you negotiate and plan wisely, it may be a soft blow. A divorce will distance you from your initial retirement goal. But, also, keep in mind that your remaining retirement investments are set to support a single person – you. Some adjustments are in order and may include revising your budget, holding off on early retirement or working a few years longer.
A dent in retirement savings
In divorce, you likely will lose a significant share of your assets; but only the marital assets, which may include your home, vacation home and, of course, retirement benefits.
As a result, your spouse will like gain a significant share of your retirement savings, pensions if you have any and, in some cases, your Social Security benefits. When dividing your retirement savings, not only can you expect lengthy negotiations and possible litigation, but also a loss on investment earnings.
During divorce negotiations, compromise may be in order, especially if you want to preserve as much of your retirement savings as possible. This may mean allowing your estranged spouse to keep the family home, vacation home or even valuable fine art collection. It is a trade-off.
Changes are in order
While going through divorce, make sure to review your finances and retirement investments. Doing so will help you as you reconsider your retirement plans. Understand that you likely will have to make some changes as you protect your financial future.