Divorce can change the way your finances look, which could alter your future plans. Prioritizing retirement planning after an event as dynamic as divorce can help you stay on course.
Knowing some strategies for rebuilding your retirement savings can give you a head start. Even in the throes of separating from your spouse, there are steps you can take to preserve your financial savings.
Take inventory
Take note of the assets you have. Know which ones you can rightfully claim and which ones you should receive in partial at the time of your settlement. Knowing what you have can help you advocate for a fair outcome at the close of your divorce.
When you have a solid idea of the assets in your name, you can begin identifying places where you will need to fill in. For example, if your soon-to-be ex removes you as a beneficiary on a 401K, you will want to begin thinking about your options for securing one of your own.
Adjust lifestyle
Especially in the months following your split, you may need to adjust your lifestyle. A divorce might lower your income while increasing your debt obligations at the same time. Embrace a conservative lifestyle and find ways to cut back on unnecessary expenses. Remember that some of the sacrifices you must make right now will only last temporarily, especially if you take a proactive approach to rebuilding your savings.
Prioritize saving
Saving money should be at the top of your list of priorities. According to U.S. News, after divorce, consider splitting the money you save into two areas: an emergency fund and retirement. Consistently contributing to your savings will surprise you over time.
Divorce is often chided as a common reason for poverty and delayed retirement. However, with the right strategies and a proactive approach to reclaiming your finances, you can prevent a lot of the financial repercussions of your split.