Baby boomers have fallen out of love – with each other.
A recent study by the National Center for Family and Marriage Research found that divorce rates among people over the age of 50 has more than doubled in the last 25 years. This group had accounted for one-tenth of all divorces back in 1990‚ but as of 2010‚ accounted for one-fourth.
Our Woodland Hills Chapter 7 bankruptcy lawyers know that divorce is one of the primary reasons our clients end up with major financial problems.
Aside from the emotional turmoil that can cause you to be less productive‚ less motivated to be organized and on-time with the bills‚ you are suddenly slashing your available funds in half. You still have to pay for a place to live and groceries and the car payment and the kids’ activities‚ all while somehow stashing away savings – except now you’re doing it with half the resources.
It’s often an even greater challenge for those in their 50s and beyond because financial plans for retirement have effectively become derailed. Suddenly‚ you are staring down the possibility of not having health insurance when you need it most and you’re trying to figure out how you’re going to split the difference on a mortgage you were both underwater on anyway.
Researchers learned those who tend to lose out the most are women who have stepped out of the labor force for years or decades in order to be the primary childcare provider.
But they aren’t the only ones. Couples who had collected a set amount of money for retirement are now looking at halving those funds‚ now that they’re planning to live separately. Economists say couples can expect their expenses to suddenly shoot up between 30 and 50 percent. As a result‚ people are having to either adjust their lifestyle expectations or put off retirement entirely.
This is certainly not a prospect many people want to think about. One option that should be on the table is bankruptcy – filed either jointly before the split is final or individually afterward. It is a way for people to eliminate most kinds of existing debt‚ while preserving retirement savings and pensions.
Older folks who are divorcing need to consider this because‚ as economists studying this issue have said‚ there is only so much time left before retirement to make up the financial ground with what’s been lost in the divorce.
It may be a good idea‚ as you’re meeting with the divorce lawyers‚ to also make an appointment to discuss bankruptcy options and whether it may be a viable option for you and/or your soon-to-be-ex. Keep in mind that if one files and not the other‚ any prior joint debts will suddenly fall squarely on the individual who hasn’t filed.
Additionally‚ you may consider the following measures are you are going through the divorce process:
- Meet with a financial advisor. Specifically discuss your concerns for retirement. Have that individual talk with your divorce lawyer.
- If you do file for bankruptcy‚ make your top priority saving. People in their 50s and 60s should know there is time still to rebuild your savings‚ rebuild your credit and‚ most importantly‚ rebuild a good life.
- Cut the apron strings. Your adult children will have to be responsible for taking care of themselves while you focus on maintaining your own financial stability. After all‚ if you enter retirement or disability without that nest egg‚ you both may find the roles reversed.
Even if you aren’t sure about whether filing for bankruptcy is the right option‚ contacting a bankruptcy to at least have a conversation about it can give you a better sense of how you personally could benefit from it.
Woodland Hills Chapter 7 bankruptcy lawyers at Cal West Law are available for a free consultation at (818) 446-1334.
Boomer divorce: A costly retirement roadblock‚ Feb. 26‚ 2013‚ By Rodney Brooks‚ USA Today