Divorce rates are on the rise - but not among younger couples, as one might expect. Instead, the increase is among couples who are ages 50 and older. According to the US Census Bureau, divorce rates among adults ages 55 to 64 are about 43% and have increased since the 1990s.
While divorce at any age is a complicated and emotional process, divorcing when you're over the age of 50 has some bleaker financial consequences than it might for a 25- or 30-year-old. That's because divorce almost always has a negative effect on a person's lifetime financial state. If you're close to retirement when you divorce, there's much less time to recover.
There are a couple of reasons for this. Women are more financially independent, which allows them to divorce without facing as stark of a financial picture as they once did. Additionally, as longevity increases, the overall length of marriage is longer. This on its own puts couples at a higher risk for divorce. Here are a few things to consider if you're among one of the many adults getting divorced after age 50.
Retirement accounts are usually considered marital property.
Preparing for retirement takes decades of planning and saving by contributing to a 401(k) or IRA. In most states, funds that you contributed to a retirement account over the course of your marriage are considered property and assets. This means that when you divorce, that money gets split between the two of you.
What was once enough to cover a single mortgage and utilities for a single household, might not be enough now that it must cover two separate households. The implications of this are profound, including the possibility of delaying retirement a few years or working part-time while retired.
Does keeping the house make sense?
During a divorce when the house is nearly or fully paid off, is keeping the house the right decision for either party? The house has a value, which means that your ex-spouse will receive some property equal to that value, and it might be retirement or savings accounts, future payments until that amount is met, or a life insurance policy.
In addition, a home comes with considerable costs that might stretch your already reduced retirement savings beyond their limit. Such as repairs, homeowner's insurance, and more.
Alimony is typically granted if the marriage has been a long one.
When marriages last a specific length of time, you can expect a form of alimony or spousal support to come into play. Divorces that end shorter marriages often include some kind of payment for a short time to assist the less well-off spouse in recovering.
Separating from your spouse can wreak havoc on not only your emotional life but your financial one as well. If you are going through this difficult event, thinking about money is probably the last thing you want to do - however, if you don’t, you could find yourself in a highly precarious financial situation once the divorce is final.
If you retain ownership of a life insurance policy during divorce negotiations that has become unnecessary, or a burden, you may want to consider a life settlement. Selling your policy for an amount greater than the cash surrender value can provide a significant liquidity event allowing you to bridge the gap in earnings.
Life settlements are an underutilized option that can be very helpful for seniors in certain circumstances. To learn more, read more about how this option can be beneficial for policy owners, or contact us today.
Retirement is more than just turning in your notice at work and packing up your desk. Beyond looking at your finances, there is other planning that should go into the decision to retire.
Define "retirement".
What does retirement look like to you? Are you sitting on the beach somewhere or traveling the world? Many people know what they are retiring from, but they don't always think about what they are retiring to. Write down your retirement goals - don't say just "travel" but instead "cruise to Cancun" or "bus tour in European countries".
Many people find themselves in financial trouble after retirement because they didn't weigh the opportunity costs of their ideal life: they'll move to the west coast for good weather but rack up high travel costs to see their grandchildren in the Midwest every other month, for example.
Be realistic about costs of hobbies: many financial planners predict you'll spend less in retirement than you did previously, but a pricy hobby (like college classes or sailing) can often derail the best-laid budget.
Improve your health.
Just before your retirement date, it is best to see all your healthcare providers. While at your appointment, ask your providers to help develop a plan to keep you fit and alert during your retirement years. Commit to the suggestions, whether they are eating two green veggies a day, walking around the mall a few times a week, flossing, or doing brain games to stay sharp.
Find any opportunities for added income.
Look for opportunities to turn your hobbies into profit. You can sell your crocheted blankets to friends, teach piano to the neighborhood children, or turn your business skills into a consulting job. Many people get bored after a few months of retirement and actually prefer partial-retirement, in which they pick up part-time jobs. Remember, retirement doesn't have to mean not working; it's just having the freedom to do what your want when you want.
If you don't want to continue working during retirement, another option is to sell your unwanted or unneeded life insurance policy in a life settlement. A life settlement can create a significant liquidity event that can fund your retirement goals; however they look. To see if your policy could potentially qualify for a life settlement, take our Policy Value Questionnaire. For more details about life settlements and policy valuations, contact us today.
Nearly 90% of financial professionals with senior clients have never helped guide them through a life settlement transaction according to a recent poll we conducted. And only 13% had their clients' life insurance appraised within the last six months. This lack of education means there is a lot of money being left on the table each year when policy owners lapse or surrender policies that could have had value as a life settlement.
On the client's side, money is tied up in burdensome premiums when the policy could be liquidated into a lump sum payment to the policy owner. On the advisor's side, money is lost in business growth opportunities. Beyond that, there are a few other reasons financial professionals need to familiarize themselves with life settlements.
Statistics show a majority of today's seniors are financially unprepared for retirement.
According to a Bankrate.com survey, 21% of respondents have nothing saved for retirement. As so many news outlets have reported over the past several years, this is nothing less than a retirement crisis. In addition to living costs, many seniors will need to pay for long-term care or costly medical treatments in retirement. If they aren't able to cover that cost themselves, it could fall on their children or other family members,
A life settlement can provide the cash these seniors need today. In these cases, liquidating a costly, unnecessary life insurance policy can ease the financial burden on the policy owners and their families.
A life settlement can create up to 8x more value than the cash surrender value.
A life settlement is the sale of an existing life insurance policy for a value greater than the cash surrender value and less than the death benefit to an institutional buyer. The key to receiving fair market value for your clients is partnering with a licensed life settlement broker, such as Ashar Group.
Through Ashar's proprietary auction process, we submit the policy to all licensed buyers creating a competitive bidding environment to drive up the value of your client's policy. If your client's policy qualifies for a life settlement solution, why surrender the policy for a mere fraction of its value?
Knowing all the options available to your clients is simply the right thing to do.
At Ashar, we believe in a simple principle: "do what is right and you will be blessed." Everyone., especially seniors and their advisory team, need to know what financial options are available to help them thrive in their later years. A life settlement can be an advantageous alternative to lapsing, surrendering, or materially changing a policy. The more financial experts know about the industry we serve in, the better we're able to educate and serve our clients.
If you'd like to find out more about life settlements, watch our video, which gives an overview of what we do and how we do it. And if you're ready to find out if a client's policy might qualify for a life settlement solution, take our Policy Value Questionnaire.
Life insurance in retirement can be a tricky topic to navigate for planning professionals. The biggest question we hear from advisors and their clients is, “How can this policy benefit me while I’m retired?” To which our response is typically about how that depends on the client’s financial goals which have been determined with their financial professional. There are several ways in which a life insurance policy can benefit you while in your retirement years.
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Unless you’re a finance geek—like all of us here at Ashar—there’s not a whole lot about managing one’s finances that could really be called “fun.” Monitoring investments, keeping track of bills and taxes…for most people, that’s more obligation than choice. (more…)
This post is part of our series for advisors to pass to their clients. Knowing more about your clients’ needs will help you to better serve them. Aging doesn’t have to be scary, and we here at Ashar want to help you provide the resources that policy sellers need to flourish in this chapter of their life.
At Ashar, we may be in the life settlement business, but that doesn’t mean that we think everyone should sell their life insurance. In fact, that’s about as far from the truth as you can get.
Life settlements can be wonderful financial solutions for many people, but only under a set of very specific circumstances. For people looking for financial relief from unaffordable premiums, or those who no longer need their policies because of changes in estate tax law or the death of a spouse, a life settlement can be a great way to generate a new stream of income. The same is true for individuals facing the costs of long term care, or expensive medical procedures for an illness.
If you fit into one of these categories, maybe it’s time to ask your financial advisor to contact us at Ashar, to start discussion your options. But if you don’t, then chances are you should keep your life insurance, if it’s at all possible.
This post is part of our series for advisors to pass to their clients. Aging doesn’t have to be scary, and we here at Ashar want to help you provide the resources that policy sellers need to flourish in this chapter of their life.
We all want to know that when our time comes, our family and loved ones will be provided for. After all, that’s the point of buying life insurance: so that when we pass away, our dependents will have some money to fall back on, to help cover any expenses or taxes and maintain their standard of living. (more…)
This post is part of our series for advisors to pass to their clients. Knowing more about your clients' needs will help you to better serve them. Aging doesn’t have to be scary, and we here at Ashar want to help you provide the resources that policy sellers need to flourish in this chapter of their life.
Just like you wouldn’t take a road trip without checking a map, you can’t expect to reach your financial goals without creating a budget. Retirement is one of these goals—congratulations on making it! Still, as Americans live longer than ever, many seniors fear outliving their assets.
Create a budget for retirement and stick to it. Assess your assets and debts, and do your best to take out no additional loans. The best way to make your money last is to be realistic about your retirement fund and what kind of lifestyle you can afford. And while many hear the word “budget” and think bread-and-water type of austerity, there are plenty of ways to live it up during retirement on a budget. (more…)
