Retirement Plans for Those Going Solo

Sometimes, even the best laid plans can come undone.

For various reasons such as divorce, separation, death, or another type of misadventure. The person you planned to spend your retirement years with, may no longer be part of your future and you find yourself going it alone in retirement. There is a lot to think about and organise at a time when you potentially feel the least capable.

Not all will find this change sad, some may find relief in the new direction. This change may cause many to consider their financial security, as this change of circumstances may be disruptive to your lifestyle and finances in the lead up to retirement. It may mean that a lot of unexpected decisions about your future and your finances will need to be made rapidly.

The Facts!

Platinum Magazine survey found that Women aged 50 – 65 are happier and more confident than women in their 20’s. Also, women who have control over their finances are more independent and have the courage to go it alone.
If you are an older woman facing life on your own for the first time in many years, don’t discount the value of a lifetime of lived experience. You may know more than you realise.

ABS Marriage and Divorces latest statistics stated that while divorce rates have fallen in Australia in recent years, there is one age group where it’s becoming more common. In the two decades to 2017, the divorce rate for men aged 55 – 59 more than doubled. For women in the same age group, it has tripled.
Although some of these people may enter a new relationship or remarry before retirement, others will be facing this life stage single with all the uncertainty that this will bring. A mixed family situation can bring with it its own set of complications, especially from an estate planning perspective.

Divorce Settlement

For anyone approaching retirement, this change of circumstance can potentially introduce greater financial insecurity into their lives. For example, after a divorce they no longer have their partner’s financial assets and income to rely on in their retirement years and potentially little in the way of savings or assets of their own.

The financial settlement process of a divorce is exhausting and there is no true winner. Your Family Law Solicitor and/or mediator has the capability and skills to work towards a reasonable outcome for all parties. It is best to go in with an open mind that is geared towards a quick solution, as drawn-out processes just cost more money in the long run. Seek good legal advice and a second opinion if you are concerned.

Moving on

Depending on the outcome of any settlement or, in the case of being widowed, the estate, both of which may take longer than you have anticipated, you may need to consider a new property purchase, rental or just a downsize to meet your new lifestyle.

All of this can be overwhelming, confusing and something you may not have navigated on your own previously. For some, to make it happen may mean working longer or even returning to work after having already ceased. For others, it may be the first time you have needed the safety net of reaching out to Centrelink. Financial advice and guidance will help with all these situations.

Retirement Savings

The need for retirement savings becomes more critical when divorced later in life. Women have less time to bridge the gap in building up the ideal amount for a comfortable retirement as this generation also tends to have undertaken more ‘traditional’ roles in the relationship, where the women have spent much of their lives out of the workforce to have children and take care of the household.

Budgeting

Did you know that on average it takes five years to recover financially from a divorce, so make this time count. Living as a single person generally costs more than half what you spend as a couple. Many essential costs such as rent, utilities, motor vehicle costs, are the same whether you’re living alone or with someone else. It’s unlikely that your living expenses will cut in half just because you’re living on your own. So where do you receive this income to meet your living expense requirement?

Start with creating a realistic budget. A budget that has your actual expenses and costs, not what you think you pay. Many banking apps have budgeting tools built in, so utilise that if you can.

Centrelink entitlements

Don’t be afraid, or ashamed, to reach out for assistance with reviewing your Centrelink entitlements. Centrelink is there to help those who need it. Good financial advice can assist in maximising this and ensuring that you can reach your living expense requirements.

Begin to invest in you, that may mean updating existing skills or re-training if going back to work or extending your working life is needed. The Australian Government has incentives for mature age women 55-64 to re-enter and participate in the workforce. These may be of interest to you.

Reach out

The most important thing that you can do to secure your financial future is to seek professional financial advice before making any big decisions. Whilst it may seem daunting to lay it all out on the table, it really helps to have an independent voice to guide you when you’re looking to set yourself up for the future.

Whilst every situation is unique, as financial advisers with many years’ experiences will tell you, there are few situations we have not seen before whereby we cannot utilise our expertise to provide guidance and help you reach your new goals.

If you’re a local, then drop in and talk to the leading financial planner Gold Coast locals have access to. Or anywhere else across the east coast – Oracle Advisory Group services people in most major towns and cities. The insight that a financial professional has can go a long way to giving comfort and assist in developing a financial plan to help you make the most of your resources and maximise your enjoyment in retirement.