Common Mistakes for Divorcees in Retirement
When you combine the aging population of our state with the typical rate of filing for divorce, you’ll see why it’s important to think about divorce issues that retirees are likely to face. To be sure, data from the census suggests that Florida has the fifth-highest divorce rate in the country, with more than 13 percent of the population divorced.
Florida residents aged 65 and older make up nearly 20 percent of the population, according to data from the U.S. Census Bureau, while persons aged 60 and older account for nearly one-quarter of the total population in our state. The Aging and Disability Resource Center of Broward County predicts that, by year 2020, adults aged 60 and older will make up nearly 30 percent of the total Florida population.
Given the connections between divorce and the aging Florida population, what are some of the more common blunders divorcees in retirement make? A recent article from MarketWatch highlights a number of mistakes that could easily be avoided, making for happier and healthier retirement years.
Failing to Have a Post-Divorce Budget
After you’ve been living with a spouse for years or even decades, you’ve likely grown accustomed to a shared budget. However, it’s important to keep in mind that your budget is going to have to endure some shifts after your divorce. Indeed, most divorcees must spend more money on bills and other payments than they needed to when they were married. Mortgage payments will no longer be shared, and monthly expenses will be your own. In short, two households cost more than one household.
Financial experts recommend making a budget so that you can “visualize the gap between your income and expenses before entering the settlement process.” It’s essential that you make clear what needs you have in your current lifestyle, and which of those needs you’ll retain after the divorce. Most importantly, how much does that lifestyle cost? Failing to create a post-divorce budget can create unnecessary financial anxiety in the weeks, months, and even years after a divorce is finalized.
Having Emotional Attachments to Property
It can be difficult to let go of property that you’ve owned for years, particularly if it’s real property where you raised a family or “planned on building your dream home.” But keeping an emotional attachment to high-value marital assets can hurt you financially in the long run. When you’re retired and you’re getting divorced, your ultimate goal (or at least one of them) should be retaining your current lifestyle even once you and your spouse live in separate households. Conflating emotional value with market value can leave you with property distribution settlement that you’re not happy with in the long run. For instance, giving up your rights to other valuable assets in order to keep your real property can mean less living-expense money in the months and years ahead.
Forgetting to Write Off Divorce Expenses
Going through a contested divorce can be expensive, but recent divorcees often can write off “anywhere from 25% to 50% of their divorce-related expenses” when it comes time for filing taxes. As such, you need to be sure that you receive an itemized list of divorce-related services to give to your certified public accountant. If you can write off expenses, you should ensure that you take the necessary steps to do so.
The common divorce mistakes we discussed above are only a few that affect retirees. If you are going through a divorce, it’s essential to discuss your case with an experienced Hollywood divorce attorney. Contact the Fort Lauderdale and Hollywood Law Offices of Steven A. Mason, P.A. for legal advice at 954-963-5900 or leave a message online.