How to Stop a Late Life Divorce From Ruining Your Retirement

Lili Vasileff joins Diane Harris to discuss the financial challenges faced by couples who divorce later in life, and how this can have a significant impact on retirement plans and standard of living, with women often being hit harder than men.

This article provides several strategies to help mitigate the financial risks.

EXCERPT:

Focus on the Biggest Assets

One spouse hanging onto the house — which, along with retirement accounts, are typically the most valuable assets that couples hold — is common, divorce experts said. But it’s often a financial mistake, especially if the children are grown.

That’s because you typically have to trade a portion of retirement savings to buy out the other spouse at a time when you’re close to winding down a career or may already have stopped working, said Lili Vasileff, a certified divorce financial analyst in Greenwich, Conn. And, the most pressing financial need after a split is typically cash flow, so tying up funds in an illiquid asset isn’t helpful.

“I ask clients, ‘If the house will eat up 70 percent of your income, are you willing to sacrifice 70 percent of everything else in your budget to keep it?’” Ms. Vasileff said.“