One of the reasons that people get married is so that they have someone to spend their golden years with. Seeing as life doesn’t always grant us the fairytale ending that we desire, a first attempt at marriage could end in divorce.
Divorce at any stage of your life can cause a great deal of emotional and mental distress. However, there is always hope after divorce, as an increasing number of Baby Boomers are finding love in this tech age. As exciting as this may be, it’s important you carry the lessons you learned from your first marriage into the next one.
Things to keep in mind with a new marriage
A primary lesson that many wouldn’t know or think to look out for during their first marriage is the financial disruption a divorce can cause if it happens close to retirement. Nobody gets married with the intent to get divorced, but in the later years of our lives, there is so much more at stake.
It is important you keep your wellbeing at the foremost of your mind. At this point your life you probably have more money and assets than you did the first time around. For this reason, if you are thinking about getting married again, it may be a good idea to consider a prenuptial agreement or getting financial counseling.
In this article, you’ll find valuable information about how you can protect your retirement before you get married again.
Discuss Your Finances Together
Money conversations can be very uncomfortable, especially during a first marriage. After a divorce, you’re likely to be far more experienced and a lot less timid when it comes to money matters. A common regret for people after divorce is not realizing the impact divorce can have on retirement funds. To avoid losses that could be damaging for your post-retirement, have honest and open discussions about your finances.
To financially plan for a happy marriage, start by being transparent about the current state of your finances. This means talking about how much money you have saved. Discussing any debt you have is also key, but be sure to leave all judgment at the door when you do.
The last thing you want is to make your partner feel uncomfortable and like they can’t be transparent with you. Also, take into consideration that you’ll probably have different money management styles. Being open-minded should help you merge both styles and meet in the middle.
The primary focus of your discussions shouldn’t only be about your personal finances, but also about what you hope to achieve together. If neither of you is retired yet, discuss how you’re going to plan for retirement individually and as a team.
Think about goals you may want to set such as building a retirement home or profitable short-term investments. Once you’ve discussed all aspects of your finances, you’re in a good position to start drawing up a formal financial plan with an advisor.
Consider a Prenup
At times, couples avoid prenup talk like plague. One reason could be because they believe in the sanctity of marriage and feel there’s no possibility of divorce. However, a prenup can be seen as a way of simply protecting your financial future.
As a Baby Boomer especially, you may not be able to afford to lose a large fraction of your pension nest to divorce. Take into consideration that Baby Boomers make up approximately 41% of the U.S. workforce and are retiring at a rate of 10,000 per day. If you don’t get a prenup, you could end up retiring later and spending your golden years beefing up your pension pot.
Although a prenup isn’t the most romantic thing, it sets financial terms about how assets and liabilities will be divided. This means that in the event of a divorce, nobody is left financially stranded. Reassure your partner that getting a prenup doesn’t mean that you don’t want to financially look after them. It just means protecting yourself, your family, and your children is of equal importance.
Prenups will also determine how much alimony each person gets if your love affair does end in a divorce. This leaves little room for unpleasant surprises if you ever do get to that point. A final step to take after getting a prenup is to include a waiver of rights, which should protect your agreement in court.
Participate in Estate Planning
When getting ready for a second marriage, you may need to think about less exciting things like what’s going to happen to your estate once you pass away. As much as most people want to live forever, you never know when your final day will be. Mapping out the details of your estate is also a way to protect your finances before getting remarried.
Prioritizing estate planning is especially essential if you have children from a previous marriage, grandchildren, or other family members you want to receive your assets. If you don’t plan properly, the people you love dearly could end up with nothing when you pass away.
Be as explicit as possible, which means making it clear who is going to get your assets and how much of them they’re entitled to. Your estate should have beneficiaries for your wills, life insurance policies, retirement accounts, and investment funds. Remember that estate planning doesn’t have to be a dreadful matter. You’re planning the legacy you’re going to leave for your loved ones with your new spouse.
Maintain Separate Accounts
Everyone has different theories about how money should be managed in a marriage. To protect your finances, it may be in your best interest to maintain separate accounts. You can, however, have a joint account for things like utility bills, groceries, and joint savings. One reason this may be a good idea is to maintain a clear division between premarital and marital assets.
This will help you safeguard your assets so that your spouse cannot claim them if a divorce takes place. Another tip is to keep a record of your non-marital assets both before and during the marriage. Also, don’t make the mistake of changing your personal assets to your spouse’s name. Doing this will also help you both feel a level of financial independence that may be comfortable for both of you.
When it comes to love and marriage, it’s never too late to open up your heart and try again. However, it is important that while you hope for the best, you also protect yourself financially. By being open with your partner, getting legal covering, and planning for the years ahead, you should be able to enjoy both a loving marriage and financial security.