Last week, 72-year-old "Golden Bachelor" star Gerry Turner announced that he and Theresa Nist, 70, are getting divorced — just three months after their TV wedding.
Depending on your level of faith in reality television, this news could be heartbreaking or yawn-inducing. Either way, it illustrates a growing trend: Americans are getting divorced later and later in life — and this poses a growing threat to retirement savings.
Over the past few decades,
And there's a high cost to these breakups: After a late-in-life divorce, seniors experience roughly a 50% drop in their wealth, according to researchers at the
For Americans on the verge of retiring, this can derail a lifetime of savings.
"It's almost like you're starting over, but with less time," said Travis Anderson, a managing member at
Anderson is currently working with three clients over age 50 who have recently filed for divorce. And he's far from alone — many wealth managers have noticed a surge in the number of older clients who are parting ways with their spouses.
"I've seen a tsunami of late-life divorces during the last five years," said Lili Vasileff, a certified divorce financial analyst (CDFA) at
How can advisors help clients in this predicament? The first step, Anderson said, is to draw up their options — literally.
"Give them a road map to how they can get there," he said. "It's a good visual technique to say, 'Here's where we are … and here are your goals. You're either going to have to spend less, you're going to have to save more, you're going to have to take more risks or you're going have to work longer.'"
The prospect of working longer — or
"Going back to work — there's a lot of anxiety around that," he said. "We couldn't stress enough that … 'Your work ethic is very attractive in today's workforce. Don't ever underestimate your worth just because you've been out of the market.'"
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Another way planners can help is by discussing how the client is splitting up their assets — before the divorce is final. Sarah Avila, a CDFA at
"The best way an advisor can help is by providing advice throughout the divorce process, not waiting until after the divorce is over," Avila said. "An advisor can help a client understand the longer-term financial consequences of dividing assets a certain way."
One important example of this is housing.
"Some clients prefer to keep the marital home, but this might mean they have to pay the spouse half of the home equity," Avila said. "The financial repercussions may cause a shortfall in cash flow, as well as prevent the client from reaching longer-term goals. It's best to discuss these things with the client before they finalize the marriage settlement agreement."
Aside from this, there are a myriad of financial details to take care of — making a good wealth manager more useful than ever.
"An advisor can help the clients through the process by making adjustments to their retirement budget, helping the clients downsize their previously shared large expenses and updating the beneficiaries on their financial accounts," said Ron Strobel, founder of
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Anderson echoed Avila's point about the timing of such advice: As with most financial counsel, the earlier, the better.
"It's not uncommon for us to talk to people before divorces are finished," Anderson said. "I know there are much more important things with kids and jobs and things like that, which will consume you more than your asset base. But it's really important to make sure you don't lose any more time and make up ground as fast as you can."
