Rate of divorce in Australia just like in most other developed countries, surprisingly dropped for younger ages,
but almost doubled for people in 50 to 70 age bracket.
We call them "grey divorces".
Somehow there is a correlation between the number of people getting married later in life
and the number of divorces at later age.
What that stipulates is the fact that people who are in pre-retirement age,
or those who have already retired that now decide to divorce, just simply married too young,
and to a degree now pay the consequences of those decisions.
I will not be going into any reasons behind decision of the divorce, for once I am not a psychologist, so that's not my place,
but divorce at any stage of life, has huge financial impact and consequences,
and that is part of my work and my advice.
as difficult as this subject is, the better you are prepared,
the more rational your thinking, the better the outcome for both parties concerned.
The problem with most divorces is bitterness, resentment, feeling of rejection, hence, revenge.
This is a sure way to lose all your savings and destroy your life, and the life of your partner.
And to be truthful with you, from then on, your life, at least your financial life will only be more difficult.
Therefore, one of the best things you and your ex-partner can do is to be civil, open and honest.
So let's go through this difficult but essential information, if this is you,
if you are in the exact situation I'm describing right now, please watch this video till the end.
This video is specifically prepared for you, so at least I can take away the financial worry
and you can go through this painful divorce and come out a better person,
but still with some financial assets behind you and then you can start putting your life back together.
My name is Katherine Isbrandt from About Retirement, I am Certified Financial Planner
and you are watching About Retirement TV, the place that is fully dedicated to explaining all financial issues we face
when we reach pre-retirement phase of our lives and if you have already retired.
And today's topic is a little bit of taboo, that is absolutely essential to be openly discussed:
divorce after 50 and impact on your financial wellbeing and your retirement.
“When people divorce, it’s always such a tragedy.
At the same time, if people stay together it can be even worse.”
Monica Bellucci
As you can see from my videos, I do like smart quotes, but I rarely would use a quote of movie celebrity,
as most of their lives are staged and just not relatable for a person that has 9 - 5 job,
doesn't live for the camera and appearances, but Monica Belluci, an Italian actress,
she was married to a handsome French actor Vincent Cassel for 14 years, and together for 18,
so let's give them some credit for understanding what married life is all about.
Having been assisting families for over 20 years,
I have noticed that in most households there is one person dominating in finance department.
Please don't assume this is always a man, oh no, I have seen some very savvy ladies,
but regardless who is the main provider or a decision maker, both parties need to start communicating
about financial matters, being very open and honest to each other when discussing divorce.
But my very first and the most important advice you can take away from here is
DO NOT go through this alone.
You need a very good legal and financial advice,
especially if you are the person who has not been decision-maker when it comes to money.
That support would not only help you with your divorce to be financially fair,
but will remove from any direct confrontation with your ex.
But there are certain things you can do even prior to making the final decision of divorce to see where you're at,
should you proceed with that divorce, and to have details ready for your legal and financial advisors.
1. Create a list of all assets
That will include your financial assets, such as your home, your contents, cars, rental properties,
holiday house, superannuation or pension funds, bank accounts, and anything that you can think of.
After that, create another list of non-financial assets, such as photographs, family memorabilia,
home items that are dear to your heart, those might not have a great financial value
but could be of important emotional value to you.
2. Create a list of all liabilities
List all the loans that you both have, mortgage, personal loans, car loans, credit cards, store loans.
Everything
3. Don not, and I repeat, do not hold on to the family home
Not only it will keep you feeling miserable, it is very hard to emotionally be ready for new,
after divorce life, but in most cases, this is exactly what keep divorced people poor income-wise.
4. Pay attention to your cash flow.
Sit down and prepare your budget as a single person.
See how much you need and then you can decide what assets can provide that level of income,
or maybe you will need to return to part-time work, but at least you are fully aware
and you can enter the divorce assets division with understanding of your life needs and not act emotionally.
5. Look at net value of assets you are about to receive from your divorce.
This is so very often ignored by many. If you divide assets, don't estimate based on gross value but rather on after-tax value.
This is extremely unfair if you receive assets and then in order to support yourself, it is essential to sell it.
The proceeds after tax may be significantly lower, leaving you in a disadvantaged position.
6. Postpone supporting your adult children.
Divorce is not the time to start helping your children.
You have to realise that your assets have just been halved,
your retirement income that you might have been counting on, has also been just half.
Now you have to concentrate on either rebuilding what you no longer have, due to your divorce,
by going back to work or reorganising your money, so you can continue.
You have to think about your own needs and your own retirement, as you no longer have a backup partner to help you.
7. Don't try to hide assets
Please do not try to hide assets when preparing for divorce.
This might be tempting, thinking that you deserve it,
but high penalties might be imposed by courts for doing so,
not to mention that this is not a fair and decent or honest behaviour towards your partner.
You both have created this life, many years together,
so the divorce also need to be fair, just and as painless as possible.
8. Have support around you
This is a very important step, many feel ashamed and want to hide it.
Also many parents feel terrible telling their children about the divorce.
Well, you only have one life, it is your choice and your decision how you want to spend it.
It should not be subject to anyone's judgement, and if your kids really love you,
they would like to see you happy and flourishing and not sad and miserable.
So find a good circle of friendly support, spend time with friends,
find new hobbies, so you don't live your divorce every second of your life.
9. Always use advice of good professionals that have your interest at heart.
If you are that person from the marriage, who has not been a decision maker,
you have to have an independent financial and legal support and advice.
I can assure you, that your ex-partner will get the best advice money can buy.
So in order to be equally informed and have an equal say in the matter,
don't try to do it yourself, don't just politely agree and accept what's given to you.
Have your professional representation and resolve this divorce
as quickly, and painlessly but fairly but also financially appropriate for you
“Don’t be afraid. Be focused. Be determined. Be hopeful. Be empowered.” - Michelle Obama
That is an emotional finish, but it is an emotional topic.
We will be discussing divorce in future videos again, especially, its impact on your retirement,
social security benefits, your assets, your income, and how to deal with such changes.
If you found this video helpful please LIKE it and SUBSCRIBE to be notified of my future videos.
Also please leave a comment and question below my video. I do answer every question personally.
Also, please visit my website AboutRetirement.com.au to find more information about
super, retirement, income streams, pension and anything related to retirement.
And while you are there, up to my newsletter to be always updated with any changes that can affect your retirement
But don't leave without watching series of videos about
how to be best prepared financially for your future retirement,
great ideas what you can do with your super money
to boost your retirement savings and income.
Second part of videos is for you if you have already retired
and want to improve your Age Pension position.
I will see you soon, bye!