Divorce After 50: Navigate Your Separation Smartly & Securely
How do I survive a divorce at 50?
One of the most significant challenges for older couples going through a divorce is ensuring financial security in their golden years. Financial concerns can be more pronounced for those in their 50s and beyond than most age groups. This is because, after all these years, your financial resources have likely become entangled with your partner’s, and separating them can be a complex and daunting process.
Women face unique financial challenges
Women, in particular, may face unique financial challenges in late-life divorce. They may have taken time off work to raise a family or may have earned lower wages compared to their partner. As a result, they may have fewer retirement savings and be more reliant on their partner’s income. Additionally, women tend to live longer than men, meaning their retirement savings must last longer.
Financial security for both
To ensure financial security for both you and your former partner, it is essential to carefully assess your financial situation and make informed decisions about the division of assets. This includes retirement plans, such as Registered Retirement Savings Plans (RRSPs) and pension plans, as well as the family home, investment accounts, and other retirement accounts.
The complexity of dividing assets
Several factors can contribute to the complexity of dividing assets after divorce at older ages. For instance, if one spouse has been primarily responsible for managing the finances throughout the marriage, the other spouse may be disadvantaged when understanding their financial situation and negotiating a fair divorce settlement. Additionally, suppose one spouse has been paying into a pension plan or RRSP for many years. In that case, the value of these assets may be significant, and dividing them can have tax implications.
Seeking professional advice and guidance is crucial
To navigate these challenges, seeking professional advice and guidance is crucial. A financial advisor specializing in retirement planning or a Certified Divorce Financial Analyst (CDFA) can help assess your financial situation, identify potential tax consequences, and provide recommendations for dividing assets in the most equitable and tax-efficient manner for you and your former partner.
In some cases, one spouse may be required to pay alimony or spousal support to the other. The amount and duration of these payments can vary depending on factors such as the length of the marriage, the earning potential of both parties and the financial needs of each individual.
It is important to consult with a legal professional to understand the laws and regulations governing alimony and spousal support in Canada and ensure that agreements are fair and reasonable for both parties.
Supplemental health insurance
Health insurance is another critical consideration in a late-life divorce. In Canada, provincial health insurance plans typically cover most basic medical services.
However, many Canadians also have supplemental health insurance through their employers or private plans. It is important to ensure that both you and your former partner have adequate health insurance coverage following the divorce, particularly as you enter older ages and may require more frequent medical care.
Surviving financially after a divorce after 50
Surviving financially after a divorce after 50 in Canada requires careful planning, professional guidance, and a commitment to rebuilding your financial security in the context of your new life. By addressing the unique financial challenges and considerations of a late-life divorce, you can lay the groundwork for a stable and fulfilling future in your golden years. Remember, there is always time to take control of your financial future and create the life you envision as an older Canadian.
Rebuilding Your Financial Future After a Divorce After 50
Taking a proactive approach to rebuilding your financial future after a divorce at 50 or older is essential. Here are some practical steps to help you navigate the financial aspects of your new life as a single person in Canada:
Establish a Financial Blueprint: Following a divorce, it’s probable that your household income and outgoings will undergo significant alterations. As a newly single person, it’s crucial to formulate a fresh financial blueprint that mirrors your present financial circumstances. This strategy will aid in pinpointing areas where you can economize, prioritize savings, and make knowledgeable decisions about your long-term financial security.
Revise and Refresh Your Financial Documents: It’s imperative that your financial portfolios, insurance policies, and estate planning records, such as your will and power of attorney, are up to date. Given your circumstances, you might need to modify beneficiaries, account holders, or authorized users.
Reevaluate Your Retirement Ambitions: Your retirement objectives may require reassessment after a divorce. It’s essential to devise a new plan to accommodate your financial status. This may entail modifying your savings and investment methods, contemplating extending your work life, or investigating alternate revenue sources to actualize your envisioned retirement lifestyle.
Reconstruct Your Credit: Should your credit have taken a hit due to the divorce, it’s important to start rebuilding it. Ensure that debts shared during your marriage are cleared or transferred to the person responsible. Also, begin establishing a credit history in your name, possibly through procuring a credit card or loan.
Engage Financial Counsel: Seek the expertise of a financial advisor or a Certified Divorce Financial Analyst (CDFA) to aid in creating a comprehensive financial plan. This should address your immediate and long-term financial objectives. They can also help you traverse potential tax repercussions and offer advice on investment strategies that cater to your unique situation.
Reenergize Your Career: For those absent from the workforce for many years, contemplate reintegration or exploring novel career avenues. If you’re currently employed, seek methods to enhance your career, augment your earnings, or cultivate new skills that may lead to improved employment opportunities.
Establish a Contingency Fund: A contingency fund is particularly vital during periods of change, such as a post-divorce scenario. Strive to accumulate at least three to six months’ living expenses to provide a financial buffer against unexpected adversities.
Ponder Downsizing or Relocation: If sustaining your current residence is financially unsustainable, consider downsizing or moving to a more cost-effective region. This could significantly cut living costs and save money for other financial priorities, like bolstering retirement savings.
Stay Knowledgeable and Flexible: It’s important to stay abreast of alterations in financial regulations, tax legislation, and economic trends that could impact your financial situation. Be prepared to adapt your financial plan to maintain progress toward your financial goals.
Even though getting divorced after age 50, often termed a “grey divorce,” can seem daunting, these steps can help ensure financial stability. Understanding these financial considerations is crucial whether you stay single or venture into a new relationship one day. Remember, older men and people tend to live longer these days, and securing your financial future after all these years in a long-term marriage is not just a good idea but a necessity.
Debunking Misconceptions about Divorce Financial Planning – Video
Divorce after 50 – Story Time
The Auditor, The Accountant, and the Kid
Before I explain how surviving divorce on a comfortable lifestyle budget is achieved, I want to tell you about the auditor, the accountant, and the kid. It started on Tuesday after the Victoria Day long weekend back in 2011. I had a new client-intake meeting scheduled for 10 a.m. The couple’s therapist had referred this family to me. In the referral discussion, she had explained that the couple’s main issue was money. The wife was fearful about the future, as managing money was not her role in the relationship or her forte. The therapist told me they would both benefit from divorce financial planning. When the couple arrived, the story they were about to share was already being telegraphed on their faces.
The Auditor and Teacher
I welcomed David and Susan (Not their real names of course) into my office, and we had an informal discussion about the future. As soon as we got started, Susan pulled out a copy of my surviving divorce guide, flipped to the post-divorce budget page, and handed me her completed post-divorce budget. I reassured Susan that she had done the appropriate first step. Having a post-divorce budget is the foundation of surviving a divorce on a comfortable lifestyle budget.
Then David jumped in and tried to take control of the conversation by explaining Susan’s budget. David was a 73-year-old semi-retired chartered accountant who spent most of his life working as a public auditor. I quickly learned that he was working two jobs during his retirement: one was at the local community college teaching accounting, and the other was bookkeeping at a samll business. Susan, fifty years old, was still working as a schoolteacher and was the primary breadwinner in the family. They had one minor child and adult children from a previous relationship. I’ll discuss more about David and Susan later.
The Kid
The kid in the story is my son, MacKenzie, who was about seventeen years old at the time. MacKenzie had wanted to attend university to become a Chartered Public Accountant (CPA). I remember thinking to myself that this kid was not accountant material; he didn’t fit the stereotypical accountant profile. Heck, he had failed Grade 10 math and had to attend summer school to earn his credit.
I remember wondering how I could support my child in his aspirations without blowing a ton of family resources on university tuition, books, and accommodations, only for him to discover that he did not want to be an accountant after all.
One day MacKenzie asked, “Hey Dad, do you know any accountants I can interview? I want to know what it’s like to be an accountant.” I replied, “I know quite a few accountants.” I thought this was my opening; talking to accountants was a brilliant idea. From the interviews, he would learn that accounting is not for him, and perhaps he would look at other career ideas. Oh boy, was I wrong.
I asked him if he’d prepared a list of questions to ask. Sure enough, he had. So I made a few calls and set up appointments with two of the accountants I know. Our first stop was with Jennifer. I knew Jennifer on a personal level. Our kids went to the same French Immersion program, and our daughters attended the same figure skating club.
Jennifer reached out to me a few times for divorce advice while she worked through her separation. She called me one day to ask if she could afford to buy a home. I told her surviving divorce on a comfortable lifestyle budget begins with creating a post-divorce budget. You can’t manage what you don’t know. Once that’s completed, things like buying a house make sense and fall into place.
I shared my post-divorce budget workbook with her. I figured this would be a simple enough task for an accountant like Jennifer.
Hell NO!
When I set up the appointment with Jennifer, she was gracious enough to open her home to MacKenzie and me. She lived in a nicely appointed semi-detached home in a desirable part of town. It was a substantial downsizing from her sprawling country estate, which her ex-husband retained in the separation.
So MacKenzie began to work through his list of questions, and Jennifer took her time to provide thoughtful and informative answers. Jennifer, with her warm and funny personality, used colourful language to emphasize her point. MacKenzie sat on the edge of his seat in anticipation, taking notes and hanging on every word she said.
When he finally asked his last question, Jennifer’s response left him dumbfounded. MacKenzie had asked, “When I become an accountant, will I manage money better? You know, my personal money.” Jennifer fell off her chair in gregarious laughter, tears rolling down her eyes. After taking a few moments to compose herself, she finally answered, “Hell NO!”
The key to starting over?
Jennifer explained, “The first thing you need to understand about money is that it’s emotional. Your father told me to create a post-divorce budget, and if I had done that, I would be on easy street. Everything would be comfortable, with no financial stress; however, I took the attitude, ‘Hey, I am an accountant. I’ve got this.’ After all, I manage the funds and operations of a successful multinational company.
They pay me nicely for the work I do, but things are different when it comes to my own money. I should’ve listened to your father and prepared that post-divorce budget. Frankly, my personal finances are a basket case. I’m in constant conflict with my money. Ever since my separation from Bill, I’ve been on retail therapy.
Between what I spent on divorce lawyers and my retail therapy, I am caring a $200,000 mortgage when I could’ve been debt-free. My line of credit goes in one direction: up.
Jennifer added, “The best advice I can give is to make friends with your money, establish a budget, work within that budget, track your expenses, update the budget, then repeat.
You don’t need to be an accountant to do this. I used to do this before Bill and I got together. I was in a great place financially back then, and then life got busy, and I lost track.
Son, for a money guy, you don’t understand money, do you?
Let’s return to David and Susan, the Canada Revenue Agency auditor and the schoolteacher. Their primary goal in the separation was financial survival, so when I prepared their financial statement, I could not believe what the analysis revealed. I realized that if they sold their home, their investment properties, and had a garage sale, they would be $50,000 in the red.
I turned to David and said, “Help me out. Am I missing something? How is it at 73 years old, you’re $50,000 in the red? You have no other savings or emergency funds, just debt.” David laughed at me and said, “Son, for a money guy, you don’t understand money, do you?” I replied, “Okay, educate me.”
David said, “Humans are not machines or computer algorithms. Humans are emotional beings; when not in check, our emotions drive our spending habits. Money is emotional. We have made many emotional financial decisions.”
Live comfortably after the divorce
It’s said that divorce isn’t won or lost by who gets what; the real winner is the one who lives well and comfortably after the divorce.
We all have emotions and behaviours
We all have emotions and behaviours around money that are shaped by early life experiences and emotions. Both of my parents died very young: my mother was 40 and my father was 54. I know that my parents’ passing at a young age helped to shape my perspective of money.
Conclusion
The separation and divorce process is not merely an emotional journey but a business transaction as well. It’s a time when informed decisions are crucial, as they can significantly impact your financial future. The stories of the auditor, the accountant, and the kid underscore the importance of understanding money management and the emotional aspects that can influence it.
David, the auditor, highlighted that humans are emotional beings, and these emotions often drive our spending habits. Jennifer, the accountant, despite her professional expertise, found herself in a financial mess due to emotional spending post-divorce. The kid, MacKenzie, learned that being an accountant doesn’t automatically equip you with personal money management skills.
The key takeaway is that managing money is not just about numbers; it’s about understanding your emotions and behaviours around money. It’s about making friends with your money, establishing a budget, tracking your expenses, and updating the budget regularly.
As you navigate your divorce, remember that it’s not about who gets what; the real winner is who lives well and comfortably after the divorce.
Consider using our Divorce Financial Readiness Indicator to ensure you’re financially ready for this significant life change. It’s a tool designed to help you understand your financial standing and prepare you for the financial implications of divorce. Don’t leave your future to chance; take control of your finances today.
Re-establishing Your Identity and Sense of Purpose
A late-life divorce can significantly change your sense of identity and purpose. You may find that your roles and responsibilities are no longer relevant, and you may need to redefine who you are. Here are some strategies to help you reestablish your identity and find a sense of purpose after a divorce at 50 or older in Canada:
Reflect on your values and passions: Explore your core values, beliefs, and passions. Consider what truly matters to you and what activities or pursuits bring you a sense of purpose and fulfillment.
Set new goals: Develop personal and professional plans aligning with your values and interests. These goals can be a roadmap for a fulfilling life in your later years.
Embrace change: Be open to change and recognize that your new life as a single person presents opportunities for personal growth and self-discovery. Embrace this period as a chance to explore new interests, create new connections, and redefine your sense of self.
Create a new routine: Establishing a new daily routine can help you regain a sense of stability and control in your life. Incorporate activities that promote your physical, emotional, and mental well-being and activities that align with your interests and passions.
Pursue lifelong learning: Engage in lifelong learning by taking courses, attending workshops, or participating in online learning platforms. This can help you develop new skills, expand your knowledge, and foster a sense of accomplishment and purpose.
Volunteer or give back to your community: Volunteering or participating in community initiatives can give you a sense of purpose and belonging. It can also help you build new connections and develop a support network in your local community.
Reevaluate your career or work life: If you are still working, consider whether your current job or career fulfills your purpose. You should explore new career opportunities, pursue further education or training, or transition to part-time or freelance work to achieve a better work-life balance.
Strengthen your relationships: Reconnect with friends and family members who may have been neglected during your marriage. Invest time and energy nurturing these relationships and creating a support network to help you transition.
Develop a spiritual practice: Engaging in spiritual practice, such as meditation, prayer, or attending religious services, can provide you with a sense of purpose and connection to something larger than yourself.
Practice gratitude: Focus on the positive aspects of your life and practice gratitude for the opportunities, experiences, and relationships that have shaped your journey. This can help you maintain a positive outlook and foster a sense of appreciation for your life and the world around you.
In summary, reestablishing your identity and sense of purpose after a divorce at 50 or older in Canada involves self-discovery, reflection, and goal-setting. By embracing change, pursuing your passions, and building a fulfilling life that aligns with your values and interests, you can create a strong foundation for your new life as a single person in your golden years.
Navigating Dating and New Relationships After Divorce
Re-entering dating and forming new romantic relationships after a late-life divorce can be exciting and challenging. Here are some tips to help you navigate dating and new relationships after divorce at 50 or older in Canada:
Give yourself time to heal: Before entering the dating scene, ensure that you have allowed yourself enough time to recover from the emotional impact of your divorce. Rushing into new relationships too soon can hinder your personal growth and lead to unhealthy patterns.
Be clear about your intentions: Reflect on what you want from a new relationship, whether it’s companionship, a romantic partner, or something casual. Being clear about your senses can help you make better choices and communicate more effectively with potential partners.
Be open-minded: Keep an open mind and be willing to meet diverse people. Avoid comparing new partners to your ex-spouse, and remember that every individual brings unique qualities and experiences to a relationship.
Use technology to your advantage: Online dating platforms and apps can be useful tools for meeting new people, especially if your social circle is limited. Be cautious about sharing personal information, and trust your instincts when interacting with potential matches.
Take your time: There is no need to rush into a new relationship or make commitments too quickly. Take your time to get to know potential partners, and allow yourself to fully explore your compatibility before making any long-term decisions.
Prioritize safety: Always prioritize your safety and well-being when meeting new people. Meet in public, tell someone where you are going, and trust your instincts if something feels off.
Be honest about your past: Be open and honest about your past, including your divorce, with potential partners. This can help build trust, foster understanding, and ensure that new relationships are built on a solid foundation.
Maintain your independence: While it’s natural to want to share your life with someone new, it’s important to maintain your independence and continue to pursue your interests and passions. This can help create a healthy balance in your new relationship and prevent codependency.
Communicate effectively: Open, honest communication is key to building and maintaining successful relationships. Ensure that you and your new partner are comfortable discussing your thoughts, feelings, and expectations.
Seek support when needed: If you’re struggling with dating or finding it difficult to form new relationships after divorce, consider seeking support from a therapist or counsellor. They can help you address unresolved issues, develop healthy relationship patterns, and guide navigating the dating scene.
Navigating dating and new relationships after divorce at 50 or older in Canada requires patience, self-awareness, and a willingness to explore new experiences. By taking your time, prioritizing your well-being, and maintaining open communication with potential partners, you can successfully navigate the dating world and build fulfilling new relationships in your later years.
Adjusting to the Emotional and Social Aspects of Divorce After 50
In addition to the financial challenges, adjusting to a late-life divorce’s emotional and social aspects is crucial for your overall well-being. Here are some strategies to help you cope with the emotional and social changes that come with divorce after the age of 50:
Seek professional support: A therapist or counsellor can provide valuable guidance and support during this difficult time. They can help you process emotions, work through unresolved issues, and develop coping strategies for adjusting to your new life as a single person in your later years.
Build a support network: Contact friends, family, and others in your community who can offer emotional and practical support during your transition. Consider joining a support group or connecting with other “grey divorcees” who understand the unique challenges of late-life divorce.
Prioritize self-care: Focus on maintaining your physical and mental health during this time of change. Engage in activities that bring you joy and relaxation, such as exercise, meditation, creative hobbies, or spending time in nature.
Develop new interests and hobbies: Divorce can be an opportunity to rediscover your passions and interests or explore new ones. Consider joining clubs, taking classes, or participating in social events that align with your interests and allow you to meet new people.
Foster new friendships: Building new friendships and connections can help you create a strong social network as a single person. Be open to meeting new people and making new friends within and outside your existing social circles.
Set boundaries with your ex-partner: Establish clear boundaries with your former partner to reduce potential conflicts and maintain your emotional well-being. This may include limiting communication, setting expectations around family events or mutual friends, and ensuring that both parties respect each other’s privacy.
Be patient with yourself: Adjusting to your new life after divorce takes time, and it is important to give yourself the space to grieve, heal, and adapt to your unique circumstances. Remember that it is normal to experience a range of emotions during this process, and be patient with yourself as you navigate these changes.
Focus on your personal growth: Embrace this period as an opportunity for self-discovery and personal growth. Reflect on your values, goals, and aspirations, and work towards creating a fulfilling life that aligns with your authentic self.
Stay positive and resilient: Maintain a positive attitude and focus on the opportunities ahead. Remember that you have the strength and resilience to overcome the challenges of divorce and build a new life that brings you happiness and fulfillment.
Adjusting to the emotional and social aspects of divorce after 50 in Canada requires patience, self-compassion, and proactive strategies for maintaining your well-being. By focusing on self-care, building a support network, and exploring new interests and connections, you can navigate the challenges of late-life divorce and create a fulfilling, vibrant life in your golden years.
Master Your Divorce: Improve Your Financial Readiness with the DFRI Online Assessment
Your DFRI, or Divorce Financial Readiness Indicator, is a crucial measurement of how effectively you can navigate your financial landscape during a separation or divorce.
It evaluates your proficiency in vital areas like
- Life Insurance
- Retirement and Pensions
- Credit Cards
- Savings
- Cash Flow Management
- Post-secondary Expenses for Children
- Separate Property
- Family Property
- Mortgages
- Tax Returns
- Disaster Preparedness
- Matrimonial homes
- Investments
- Business-related aspects
The savvy ones who truly know their money tend to make smarter financial decisions in these trying times.
Here’s the remarkable aspect of DFRI: unlike IQ, which relies heavily on the genetic lottery, financial intelligence is a skill that can be acquired. The best part? It’s far from rocket science, especially when a solid Divorce Survival Plan is in action.
These 15 areas are fundamental to achieving a fair settlement, that you must equip yourself with knowledge and preparation before any negotiation attempts.
I feel so passionately about this that I devised a unique self-assessment process called the Divorce Financial Readiness Indicator. It consists of a preliminary interview followed by detailed feedback, and my clients find it incredibly beneficial.
Here’s how it works:
You’ll respond to 15 multiple-choice questions via an online platform. Based on your responses, I’ll provide written feedback for each question and an action plan to address each area.
I’m thrilled to extend this transformative service to you online.
Please try it out and undergo the online DFRI assessment. I’ll eagerly await your completed review.
And remember – schedule your complimentary follow-up call after you finish the DFRI. Let’s take this crucial step together on your journey to financial readiness.
Conclusion
In conclusion, the phenomenon of ‘gray divorce’ or ‘grey divorce,’ referring to couples divorcing in their middle age or later, has significantly increased, particularly among baby boomers. This late-life divorce process, often occurring around the age of 50 or retirement age, can have profound implications on retirement planning and the division of retirement accounts, including investment and other retirement accounts.
The divorce settlement in these cases can be complex, given the long-term financial considerations, such as the tax implications or tax consequences of dividing assets and Spousal Support. The divorce proceedings are further complicated by family property laws can significantly impact the division of assets.
Moreover, the impact of a gray divorce on the ex-spouse’s financial situation can also be drastically affected, so it’s crucial to understand the divorce process fully and consider all potential outcomes.
In many ways, a no-fault divorce may seem like the best option for some, but it’s essential to consider the long-term effects and whether it’s the best way forward. As the divorce rate among people over 50 continues to rise, it’s more important than ever to navigate these proceedings with care and foresight.
One day, you may find yourself part of this statistic, and it’s crucial to be prepared. It’s important to remember that getting divorced at this stage in life can be challenging but not impossible. With careful planning and consideration, it’s possible to secure a future that, while different from what you may have envisioned, can still be fulfilling and secure.
Gray divorce is not just a trend but a reality for many. It’s a complex process with many facets, but it can be navigated successfully with the right knowledge and resources. Understanding the implications, especially regarding retirement planning and tax consequences, is essential to ensure the best possible outcome for all parties involved.
Would you like to learn more? Get in touch for a Get Acquainted Call to learn more about finding a separation agreement with a soft landing.
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Ken Maynard CDFA, Acc.FM
I assist intelligent and successful couples in crafting rapid, custom separation agreements that pave the way for a smooth transition towards a secure future. This efficient process is achieved in about four meetings, effectively sidestepping the excessive conflicts, confusion, and costs commonly linked to legal proceedings. Clients have the flexibility to collaborate with me either via video conference or in-person through a DTSW associate at any of our six Greater Toronto mediation centers, located in Aurora, Barrie, North York, Vaughan, Mississauga, and Scarborough.
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Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/May 23, 2023
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Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/June 2, 2022
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Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/May 20, 2022