![]() ![]() Kimberly Ambrogio is a Market Director at J.P. It is always advisable to seek out and work with a qualified professional in their area of expertise to determine your unique situation and what particular options are available to you. This article is not meant as counseling, investment, tax or legal advice, but rather information. The income that once supported one household may now be supporting two, and various scenarios can be modeled through the use of specialized software and individualized reports for couple/families – so that options can be understood to minimize the financial impact on a retirement plan and provide longer term peace of mind.īoth the IDFA ( Institute for Divorce Financial Analysts) and the ADFP ( Association of Divorce Financial Planners) be resources for finding a CDFA™ (Certified Divorce Financial Analyst) professional to support you and your client in these scenarios. Managing expectations is paramount in this scenario. Planning for these scenarios should be a key part of financial planning, and a Certified Divorce Financial Analyst (CDFA) can help with this. Understanding and preparing for these possible scenarios is an important part of a financial plan to help ensure future financial security it’s NOT just about sequence risk (withdrawing/selling assets in a down market during retirement). They may even run “Monte Carlo” simulations to see how your portfolio would have fared in previous economic scenarios and try to project the likelihood that you will be OK in retirement. They manage this risk through “diversification”. Now what?įinancial Planners & Wealth Managers focus on various forms of unsystemic risk when planning for retirement such as company risk, sector risk, inflation risk, longevity risk (outliving your money), concentration risk etc. A late-life divorce can wreak havoc on even the most well-thought out retirement plan – as there is little time to amass assets and recover from the loss of anticipated retirement income. So for those in their 40”s, 50’s and later, this is a real planning concern. ![]() The divorce rate for those over age 50 has doubled in the past 20 years according to research by Bowling Green State University. Divorce is long and complicated – we need to be prepared legally, emotionally & financially. Who want to think about that, but we must, just live we talk about and model the potential need for life insurance. Of course planning your finances around the potential end of a relationship is uncomfortable to say the least. Yet many Americans age 40 and older do not have an actual financial plan to model the income loss after the loss of a partner due to separation, widowhood or divorce, according to a new survey conducted by The Harris Poll on behalf of TD Ameritrade and out-lined here. This may also include increased taxes that are owed as a single filer – as that reduces net spendable income. It means that planning for the loss of income due to loss of a partner, including divorce, is so important. Then add in that Retirement Security Trends in Marriage and Work Patterns May Increase Economic Vulnerability for Some Retirees according to a report to the Chairman, Special Committee on the Aging in the US = this is a serious planning concern. Census Bureau roughly 80% of women will outlive their husbands, and we’ve also heard that approximately 60% of women alive at 62 can expect to live to age 90. The current landscapeĪmericans are living longer than previous generations with an average life expectancy reaching nearly 79 years old and typically women live longer than men.Īccording to the U.S. I recently read an article that hit home for me as a single divorced Financial Planner and raises the question, “Why isn’t the divorce scenario tested when creating financial plans? “. ![]()
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