If you're getting close to retirement age but you find yourself thinking of a fresh beginning, you may consider divorce. Divorce used to be more common among younger couples, but modern divorces include couples who have been married for decades. With the children out of the house and the potential for long days together ahead, you may find that you no longer want to remain married.
Over the course of your marriage, both you and your spouse have grown accustomed to a particular standard of living. The uncomfortable truth is you will likely need to make lifestyle changes in the wake of a divorce. Instead of benefiting from your combined income, each spouse will need to make ends meet with only what they personally earn. That can impact many aspects of your life, including your plans for your upcoming retirement.
Most retirement assets get split in a divorce
In most California divorces, any amounts deposited into retirement accounts during marriage are marital property. The courts will divide those assets evenly between spouses in most situations or at least allocate items of similar value to a spouse if they don't split the retirement account. Usually, this means that you will have substantially less in your account that you had hoped for.
You will likely need to retire on half or less than half of what you had saved so far during your working life. Both you and your spouse should receive a fair portion of retirement savings accumulatd during your marriage. The good news is you don't have to worry about early withdrawal fines or penalties if the account split is part of a court order, commonly called a Qualified Domestic Relations Order (QDRO).
Honestly review your expectations for retirement
People who have substantial assets may also have big dreams about what they want to do during retirement. You may have dreamed of traveling the world or buying an RV to drive Route 66. Perhaps you hoped to remain in the same home, or maybe you intended to relocate to a more rural location. Whatever your hopes and dreams, you may have to reconsider them to make them more realistic on the reduced income and savings you'll have after divorce.
There are plenty of creative solutions that can ensure you have a great retirement after a divorce. Living with your family or with friends, scaling down travel plans or reducing the expenses by focusing on a budget or even working a few more years to rebuild your savings are all viable options. You shouldn't let concerns about financial changes keep you from pursuing your freedom and your happiness during retirement.