A divorce can completely change your plans for the future. What was once a promising retirement plan may now appear incomplete and insufficient.
When you understand the impact of a divorce on retirement planning, you can begin right away to fortify your finances. Your proactive attitude may help you rebuild your wealth so you can continue to work toward achieving your goals.
Picking up the pieces
When you split from your spouse, the outcome of your retirement plan will depend on several factors, including the following:
- The length of your marriage
- The type of shared retirement benefits
- The earning potential of both parties
Often, courts will split the value of retirement benefits. This could drastically reduce the amount of money you have to put into your future. Once you receive your settlement, refrain from cashing it out or spending it. Rather, learn about your options for rolling benefits into a personal plan where you can continue to build upon what remains.
Rebuilding a strategy
Retirement planning might look different now than it did during your marriage. According to Experian, rebuilding your strategy will require tenacity and consistent effort. They suggest that you follow a conservative budget, look for ways to bring in additional income and do your best to maximize your contributions to a retirement account.
Despite the negative rap divorce often gets, a proactive approach to rebuilding can help you retain control of your future. With the right steps, you can gradually rebuild and still have a promising future.