Texas residents who are considering divorce or going through the process are concerned with the many changes it might bring. One of these concerns is often how it will financially affect them during retirement. In most cases, the impact is negative. The only exception seems to be single women, whether they had always been unmarried or were divorced.
According to a Center for Retirement Research study, households that have not gone through a divorce are about 30 percent wealthier than those comparable households that have. In fact, a divorce puts people at a 5 percent higher risk of running out of financial assets during retirement.
The study found that women often got the family home in a divorce and were traditionally advised by financial planners to get rid of it. However, the study also found that the equity available to women through their home was actually what could make the difference during their retirement. Over time, many homes gain in value while the mortgage payments decrease. For many, this means that if they are willing to sell their home and downsize when they are retired, or use a reverse mortgage, they can put themselves into a better financial position during retirement. While many may have struggled to pay for that mortgage initially after the divorce and had to sacrifice to do it, in retirement, the house becomes a big asset that can help them. Additionally, a home is both a financial asset worth actual money and a place where the owner can physically live, something that a retirement account cannot provide.
Planning for life after a divorce includes many aspects. People might benefit from consulting with a family law lawyer who can explain their options and may help them design a plan for the future.