A divorce can have a significant impact on your ability to retire. Michigan law generally requires that joint assets such as money in a retirement account are divided in a final settlement. Additionally, you may need to use money in a savings account to pay for expenses related to ending a marriage.
The numbers don’t lie
According to the National Institute for Retirement Security, a married man has an average of $58,951 in an individually managed defined contribution account. However, that same man would have saved an average of $136,055 in a household defined contribution account. Meanwhile, the average value of a woman’s individually managed retirement account drops from $50,126 while married to $38,613 after it comes to an end.
How to salvage your financial future
One of the easiest ways to recover after a divorce is to create a long-term financial plan as soon as you know that your marriage is coming to an end. You can maximize the chances of meeting your financial goal by having a portion of each paycheck wired directly in a savings or retirement account. It may also be in your best interest to learn about the benefits of putting money into the stock market or taking advantage of other investment opportunities.
The end of a marriage will likely alter your financial plans. In addition to potentially losing a portion of your retirement savings, you may find it harder to save money while also paying rent or other expenses on your own. An attorney may be able to help you obtain or retain assets that might be needed to maintain some semblance of a comfortable lifestyle. Depending on the length of your marriage, it may be possible to claim Social Security benefits based on your spouse’s work record.