A divorce settlement, even at its most amicable, is emotionally stressful for both parties involved not to mention financially stressful.

During a divorce settlement, probably the largest issue apart from custody of children, is dividing assets. This could have irrevocable consequences for the finances of both parties involved, especially on retirement planning.

Because assets are divided, the financial plans would probably need to be revised according to new circumstances.

Consequences for pensions

•    pensions could be divided between spouses either at divorce or at retirement, meaning there is a major shortage in retirement savings. 
•    If spouses are at retirement already, both would have to downgrade their lifestyle to survive as the capital has reduced.
•    If spouse have their own pensions, it might be advantages to each keep their own pension. This depends on the marriage contract.
•    Spouses may have to continue working after retirement age due to not having enough saved up.
•    Spouses would have to revise their retirement plans and contribute significantly more to make up the losses incurred in divorce.
•    Lifestyle standard might have to be downgraded or major cuts made to the budget to afford larger retirement premiums.

Although prenuptial contracts might exclude any individual pensions, the individual value of divided assets will be reduced, and it is best to consult with a financial advisor to revise your retirement plans and find ways to build your wealth again. [email protected]

 

Please note, the above is for education purposes only and does not constitute advice. You should always contact your Acuma advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.