In Ohio and across the United States, people have been forced to adapt to the new normal in myriad ways. The national health challenge has caused major changes to people’s lives. Unfortunately, that has included the rising trend of couples deciding that they can no longer remain in their marriage, subsequently choosing to move forward with a divorce. As difficult a decision as this is, once it is made, there are various factors to consider – particularly with finances. These should be understood and addressed to be protected from future problems.
How divorce can negatively impact a person’s finances
The aftermath of divorce often depends on who the main breadwinner in the household was. For women, these challenges are exacerbated because they frequently have other responsibilities like caring for children and overseeing the family. After the divorce, there will inevitably be a noticeable reduction in income – often by half. In male-female marriages, 69% had the husband earning more than the wife. A woman 50 or older is likely to earn 41% less after the divorce. For men, it is 23%. This should be assessed as part of the divorce and steps should be taken to mitigate this disparity.
People approaching retirement age should be cognizant of how the divorce can hinder their plans. If the intention was to live off savings and retirement accounts, that could be split in a divorce. Getting divorced can also be expensive and deplete savings. In addition, there will be unexpected costs. In many marriages, one spouse handles the finances and the other is limited in his or her knowledge of it. This can result in unwanted surprises such as how much is owed on credit cards, for a mortgage, what is in the bank and more.
To address these and other issues, help might be needed
Over the past four decades, divorce had been reducing significantly across the U.S. With people working from home, facing a declining income, losing their jobs entirely, dealing with medical costs and homeschooling children, people at least contemplating divorce has risen by more than one-third. The most vulnerable couples were those in a relatively new marriage. For people 50 and older, the divorce rate doubled in the past 30 years. For those 65 and older, it has nearly tripled. With these realities, it is imperative to be prepared. Consulting with experienced professionals can provide guidance and assistance with the entire process.