Newly divorced after age 50? How to rebuild your finances

At an age when couples should be preparing for their retirement, some are getting divorced.
According to a March 2013 study by Bowling Green State University, one in four people who divorced in 2010 were age 50 or older. (Compare that to 1990, when the rate was less than one in ten.)
Later-life divorces can be especially rough in terms of re-establishing your own savings and credit history. Here are some tips to consider for the difficult journey ahead.

Assess Your Finances

Once the ink is dry on your divorce settlement, immediately create a comprehensive picture of your assets and liabilities. To see where you need to go financially, first find out where you stand.
Pull together banking statements, tax returns, and any other financial documents. Request a credit report from each credit bureau.
Note all your savings accounts and investments, including  403(b), 401(k), 529 plans, IRAs, annuities, pension plans, mutual funds, and so forth. Include everything with substantive value — life insurance, stock options, profit sharing.
Now list your debts, both short-term and  long-term: mortgage, car payments, rent, credit cards, insurance, and student loans. Add monthly expenses like utilities and food. Don't forget the cost of health insurance (plus the value of health savings or flexible spending accounts).

Bring in the Pros

Review the collected information with a financial professional. They can help you set up new accounts, assist with budgeting and debt reduction, and look for potential tax savings.
For longer-term questions, speak with a TIAA advisor. They can guide you through issues like retirement income planning.
Tough decisions will need to be made. Some have immediate consequences, others will steer you to where you want to be in 10, 20, or 30 years. For example:
  • What is a reasonable retirement goal, and how can you plan to achieve it?
  • How much readily-accessible money will you need this year and next?
  • If you need cash in case of an emergency, which accounts should you tap first?
  • What are the tax consequences of each decision?

Create a New Budget

Creating a post-divorce budget is a great tool for helping you understand your options and prioritize your next steps. For example, ask yourself:
  • What are my savings goals for the next five years?
  • Do I need to scale back my spending, or find a higher-paying job?
  • Should I go back to school? If so, can I afford it?
  • Should I stay in my current house, or switch to an apartment?

Boost Your Retirement Savings

After age 50, retirement is always an important consideration when outlining a budget, especially if you are divorced.
Ask your TIAA advisor about the investments in your portfolio. Is your current strategy in line with your retirement goals?
Also, consider taking advantage of any 'catch-up' provisions in your retirement accounts for people age 50 and older.
Also, even if your spouse has remarried, you may be able to receive as much as half of your ex's Social Security benefit.   Check the eligibility requirements on the Social Security website,

Preparing for Your New Financial Future

Going through a divorce will bring big changes to your life, but you don't have to navigate those changes by yourself.  A TIAA advisor can help you build a financial strategy based on your changing circumstances.