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Divorce and retirement

Whatever the circumstances, divorce is a major life change that needs some careful thought and planning. Getting a clear understanding of your finances is a key step towards making sure you’ll be secure on your own.

Trends in divorce

Whilst marrying later in life is a trend we’ve seen in recent years, so is divorcing later in life. According to figures from the Australian Bureau of Statistics the average age of people getting divorced in Australia is at a record high, now more than five years older on average than they were 20 years ago1. In 2015, the reported median age at divorce was 45.3 years for males, and 42.7 years for females.

The average age of people getting divorced in Australia is at a record high.

Getting a firm grip on your finances

If you’re heading for divorce, it’s important to take stock of your financial position as soon as possible. Here are five things you can do now to get your finances in the best shape for your future.

  1. Do a financial audit - if you don’t already have a good overview of your own savings and income, assets and liabilities, do a thorough audit. Bring all the information together so it’s easy to access and have a back up for account details, statements and other financial paperwork stored online. If your spouse was the one who usually took responsibility for managing the finances, now’s the time to get up to speed.
  2. Monitor cash flow - having enough money to cover day-to-day expenses is important for your immediate peace of mind. It might be a good idea to set up a “rainy day” savings account to ensure your cash flow is covered, should any unexpected expenses surface.
  3. Steer clear of debt - make sure you’re being disciplined with your spending and avoid building up a significant amount of personal debt through loans or credit card balances. Debt can soon add up if you’re not carefully monitoring your spending, so try to avoid it.
  4. Check your will – review and update your insurance and super beneficiaries and your estate plan to make sure your assets will pass to the right people now that your circumstances have changed.
  5. Keep a healthy credit rating - outstanding bills or loan repayments can affect your credit score. Make sure you only have your name on bills and loans that you’re responsible for paying.

Having enough money to cover day-to-day expenses is important for your immediate peace of mind.

Communication is key

Knowing where you stand financially is just the first step towards living independently after a divorce. If you have dependent children or relatives and limited assets, super and savings to fall back on, going it alone will take some planning.

Communication is key when it comes to getting the best outcome from every aspect of your divorce.

Communication is key when it comes to getting the best outcome from every aspect of your divorce. Even when you’re working things out in an amicable way, get an independent view on how you’re planning to divide up your assets to ensure you’re both provided for. After your divorce, it’s a good idea to seek professional advice about your finances. This will give you a much greater sense of security as you step into the unknown.

Need help managing your money?

Getting expert advice can make a big difference to how prepared you are for retirement on your own. By discussing your lifestyle goals with a StatePlus financial planner you’ll have a much better understanding of the super and income you’ll need to make retirement a positive change in your life.

For more tips and tools, download our free Retirement guide or call us on 1800 620 305.

1 Australian Bureau of Statistics Media Release, “Brides, grooms and divorcees have never been older” 30 November 2016
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Aware Super Pty Ltd ABN 11 118 202 672, AFSL 293340, the trustee of Aware Super ABN 53 226 460 365. Financial planning services are provided by our wholly owned financial planning business Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430.

This information is of a general nature only and is not specific to your personal objectives, personal situation or needs. Before making any decisions based on this information you should consider its appropriateness to you. Every effort has been made to ensure the information is accurate. We strongly recommend that you consult a financial planner before taking action and review the relevant Product Disclosure Statement.

Past performance is not an indicator of future performance and future performance is not guaranteed.

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