A large majority (80 per cent) of “grey divorcees”, people who divorced at the age of 50 or older, say they will delay their retirement because they need to work longer than planned and more than half (62 per cent) say their post-divorce savings and investments will no longer be adequate to fund their retirement, according to new research from Investors Group.
“Going through a divorce can be difficult at any age, but older couples face unique challenges in retirement planning as a result of later-in-life separations,” said Christine Van Cauwenberghe, Assistant Vice-President of Tax and Estate Planning at Investors Group. “With limited earning power and less time to recoup their financial losses, grey divorcees need to re-visit their financial plans.”
Financial decisions can be difficult on your own
Fifty-four per cent of those who divorced at or past the age of 50 found it difficult to make financial decisions surrounding their divorce and when it came to organizing their finances post-divorce or separation, almost one-third (31 per cent) found this task overwhelming.
More than half (53 per cent) say they have had to adjust their retirement plans and of this group, 55 per cent say that their plans completely changed. Almost half (47 per cent) say they will have to scale back on their anticipated retirement lifestyle.
“Divorce is an emotional process that can cloud your ability to make sound financial decisions that will ultimately affect your future,” said Christine.
Bitter divorce equals bigger challenges
When it comes to parting ways, more than a third (35 per cent) of respondents say they would classify their divorce as bitter. A significant majority (80 per cent) of that group say they found it difficult to make financial decisions surrounding their divorce, compared to 54 per cent of all grey divorcees
|Financial difficulties:||Percentage of those who had a
|Percentage of all
|Managing living expenses post-divorce or separation||57%||47%|
|Division of assets causing financial stress||49%||36%|
|Cost of divorce proceedings||54%||33%|
|No longer having enough retirement savings||32%||26%|
|Did not encounter any financial difficulties||8%||23%|
Experts can ease the process
Almost three quarters (74 per cent) of respondents who sought the advice of a financial advisor during their divorce agreed they were given sound financial advice throughout the process and 82 per cent agreed their advice was helpful post-divorce.
And those who sought financial advice before their divorce were more confident about their retirement with 39 per cent feeling they would still have enough savings and investments to fund the retirement lifestyle they had planned. Of those who did not work with a financial advisor, only 28 per cent believe they still have enough to fund their retirement.
“After any life change it is crucial to reassess your current financial plan to ensure that it reflects your new direction in life,” said Christine. “As you get closer to your retirement years there is a greater urgency to have a financial plan in place that helps you to achieve the lifestyle you envision whether it be together or apart.”