Over 50 and thinking about getting divorced?

People aged over 50 should carefully consider how their retirement finances could be affected by their divorce, according to Kevin Mackenzie, a Financial Planner with Acumen Financial Planning and a member of Consensus Collaboration Scotland.

“Silver splitters” are a growing phenomenon, due in some cases to empty-nest syndrome or sometimes simply to couples drifting apart at this point in their life. With longer life expectancy, an increasing number of people who are unhappy in their relationship are unwilling to continue for another 20 or 30 years in the same situation.

Kevin Mackenzie comments: “Divorce can be especially complicated for people nearing retirement, even if any children have already flown the nest and there are no custody issues to consider. For a start, there are frequently more assets and investments involved as they may have been built up by the couple over the years.

When asked what their major assets are, most people tend to think first about their home, savings, art or jewellery. However, their retirement savings and pension plans may well in fact represent their largest asset. A pension plan can only be accessed from age 55 and only 25% is tax free, whereas the remaining fund is subject to income tax, unlike a more liquid asset like a property. It is therefore important to appoint a suitably qualified Financial. Specialist to consider the after tax result of each option, allowing both parties to reach an informed and amicable decision.

A less adversarial approach to the divorce process is therefore highly advisable. That’s why collaborative divorce can be a great alternative for couples over 50. It commits each spouse to reaching the best longer term financial outcome for both parties.

Fortunately, people in this age group are sufficiently mature to know they will continue to have contact with each other through their children, grandchildren and maybe even their mutual friends, so a collaborative approach can work very well for them, both in financial and emotional terms.”

If you are over 50, considering a separation or divorce and would like further advice on how your retirement finances might be affected, please contact a Consensus Collaboration Scotland professional.