CNNMoney observes that retirement planning “often goes by the wayside when your marital status changes” and cites some sobering statistics about what happens when a person divorces or must deal with the death of a spouse. The loss in income for women after such life events is often steep:
“Women often find themselves especially pressed: Household income drops 41% for women after a divorce and 37% in widowhood, compared with under 25% in both cases for men, according to a report by the Government Accountability Office.”
The article is very blunt: “Forget the house, go for the pension.” Some feel like getting the house means walking away with the prize without considering fickle housing markets and the challenges of maintaining a house on one salary. You can find somewhere to live; it is more difficult to replace the funds accumulated in retirement accounts. This may be less of concern if you decide to sell the house and divide the profit.
After Losing a Spouse
This standard advice bears repeating: Wait six months to a year before you make any major financial planning decisions. Before that you will still be processing your loss and unable to distinguish between the well-intentioned and not so well-intentioned suggestions of friends and relatives with regards to spending or investing life insurance and retirement money.
Ask for Help
The article also has recommendations for how one can keep things simple when first investing money if your spouse was the one who handled money and investments.
A Fee-Only financial planner can be an impartial resource to help get your finances on track as you work through the emotions associated with the end of a marriage. No matter how capable you may be, you can benefit from expert advice and perspective as you transition into a different phase of life.