In this blog I like to emphasize how, in our retirement years, all our decisions should hang together, because everything naturally interconnects. Financial decisions connect with one another, non-financial decisions connect with one another, and financial decisions connect with non-financial ones.
When divorce arises (and especially when it SURPrises), all of this is true in spades. The issues are numerous, urgent, difficult, often gut-wrenching, sometimes overwhelming, and deeply intertwined with one another.
And, sadly, these situations are becoming more prevalent. When Al and Tipper Gore split last year, a lot of us learned in news reports that this event reflected a modern trend – increasing numbers of divorces among older couples. The papers made it sound as if this tends to be cozy and amicable, and many times it is. But all too frequently, someone gets left holding the bag.
I recently asked Renée Senes about this. Renée is a financial consultant here in Harvard who, as a Certified Divorce Financial Analyst, deals with these issues every day.
She confirmed that she herself now sees more people in their 50s and 60s than she used to (though not in their 70s – at some point maybe you really are home free!).
Renée also says that about 90% of her own divorced clients are the ones who were left when the spouse precipitated the situation, and that most of them are women. She is not an attorney, and does not handle divorce proceedings directly. But she provides financial counsel to people who are going through a divorce, or have recently emerged from one. Many of her clients come to her “shell-shocked,” as she puts it, and it is clear that, to them in particular, she is a godsend.
Her experience also underlines the importance of looking at the totality of life when we get into our older years, especially when a crisis occurs. Even when divorce makes sense to both parties, and certainly more so when it does not, it triggers major changes – and typically major problems – in multiple areas of one’s life simultaneously.
On the financial side, the person who did not choose the divorce is also often the person who did not have responsibility for paying the bills and managing the investments and getting the tax returns in. Many women (it typically is the woman, though not always) have little clue how to survive in this situation, Renée observes, because they often are not very familiar with financial concepts in general, with the details of their family finances, or with the real-life implications of the financial terms of a divorce decree. Renée says her clients are smart and capable and certainly have the ability to manage the finances. But there's a learning curve to master and doing it in a crisis is challenging.
And that’s just the beginning of it. The ramifications of divorce are almost unending, starting with the immediate emotional trauma (in many, probably most, cases). Renée observes that while not everyone in this situation needs professional counseling, she always lets her clients know about local support groups and other options, especially if there are children involved. Tellingly, clients are sometimes referred to her by therapists.
When older couples divorce, children (if any) are grown, and the effects on them are usually less than on young children. But that doesn’t mean that there can’t be strong feelings, and the need for redefining family relationships. That much is pretty obvious.
Renée points out, however, that other consequences are not so obvious, and that they can unfold in unexpected and unpleasant ways over a long period of time.
For example, at least one member of a divorcing couple is going to have to move. Often, however, both have to move, because neither can afford to keep the house on his or her own. That is difficult enough, but it is made more difficult because of the uncertainty: it’s often not apparent right away whether the house needs to be sold or not. Each spouse’s whole financial picture is changing. Old assumptions no longer hold, and it can take a while to figure out what the new ones should be.
Older women who get divorced are more likely than younger ones to have been out of the workforce for a long time, Renée observes. This means that it is harder for them to find decent-paying jobs. So they may be able even less able to afford to stay in the former family home.
In rural communities like Harvard, this is particularly stressful, because there are few rentals available, and so a divorced spouse often has to relocate to another town. At a time where one would hope for neighbors and community to gather round and lend support, relocation makes this more difficult, and forces the divorced person to make additional adjustments at a time when she (or he) is already experiencing great stress.
Renée helps her clients work through these issues, even though, as she emphasizes, easy solutions may not be at hand. “I never say, ‘It’s going to be O.K.,’” she told me, because it might not be O.K., at least not very soon. But having someone present who can look at the situation calmly, sanely, and with a wealth of practical knowledge and experience, offers the suddenly divorced party a good shot at making the best of a hard situation.
When thinking about retirement generally, a strong emphasis is often placed on planning, and rightly so. But in a divorce at least one person is usually caught off guard, and there is no opportunity for planning ahead. Even so, Renée stresses the importance of not waiting too long to start thinking about life after divorce. She says that many of her clients don’t come to her until the divorce decree is final, a decree which too often is signed just to get it done with, and without really understanding the implications. Or even later, when foreseeable but in fact unforeseen problems have arisen.
As in any crisis situation, the sooner you get the help you need, the better. So if you or someone you know gets surprised with a late-life divorce, or a not-so-late-life divorce for that matter, you might want to get in touch with Renée or someone else with the CDFA designation. (Renée happens to be the only one here in Harvard or even within one or two towns of Harvard with this certification, but if you are outside of this area, you can locate your nearest CDFA at https://www.institutedfa.com/cdfaSearch.php.)
Renée Senes can be reached by email at firstname.lastname@example.org, or by telephone at 978-456-9600.
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Chuck Yanikoski is a retirement adviser who lives and works in Harvard. For more about him, visit http://www.ChuckYRetirement.com.