SPLITS CAN TAKE TOLL
Divorce impacts on emotions and assets
After a long marriage, the last thing couples expect to have to deal with in their retirement is divorce. But more over-50s are finding themselves suddenly single, and forced to start over financially or adjust their plans for retirement.
The average age of divorcees has increased over the last 25 years, data from 2013 shows.
The average female divorcee was 42 years old while the average male divorcee was 44, compared 32 for women and 34 for men in 1990.
And while the divorce rate for people in their 30s and 40s has now decreased, it has jumped for those 50 and older.
This is mainly because people are marrying later, which means the divorce age has also gotten older.
There may have been a time in the past, where couples would have ‘stuck it out’, that isn’t the case now.
According to an article by Robin Bowerman, Principal of Vanguard Investments Australia, separation means that a former couple’s assets – including the family home, their superannuation and other investments – are split.
“Solely from a retirement perspective, a relationship breakdown means that not only are retirement savings divided but each person has to pay for separate accommodation,” he says.
“Many separated individuals, of course, can no longer afford to own a home. And the reality is that it typically costs much more to finance the retirement of two single people than a couple.”
The truth of it is divorce for the over 50s (and at any age) is always going to be hard. While any children are likely to be older and custody is not an issue, financially, both parties come out less well off due to the nature of dividing and separating assets.
Financial planner James WalkerPowell from More4Life Financial Services says he has been privy to many separations in his professional capacity.
He says more often than not, an unhappy relationship can lead to overspending in the relationship.
“The issue is, generally speaking that when people are really unhappy it is compensated by spending money and they never get ahead,” he says.
He recalls one client who was struggling in his relationship and in his finances.
“He just couldn’t get ahead and then he broke up with his wife, moved in with a new partner and even though he gave 70 per cent of his wealth away – five or 10 years down the track he’s in a much better situation because of he’s in a much better space.”
He says he’s had clients who felt stuck in the careers, because they were the major breadwinner.
“And when they’ve split, they’ve had the freedom to go and pursue other careers and passions because the pressure was off,” he says.
“Rigor mortis had set in when you’re stuck in a relationship or stuck in a job and then it breaks down, everything is assessed.”
“Life’s too short to be miserable and they get on with what their passions are.”
Life’s too short to be miserable and they get on with what
their passions are