It’s a simple law of economics that it costs two people less to live together than apart. So, when couples divorce, living expenses go up. Ensuring that you can support yourself after divorce is a priority and that means creating your plan for financial independence. It can mean very significant adjustments for anyone who’s been the stay-at-home parent or whose income paid for the extras, the niceties rather than the essentials. Obviously, it can be a huge and worrisome challenge.
My present guest, Elizabeth was in her sixties when her thirty-eight year marriage ended. Although she had had her own business, it didn’t generate enough income to support her. Lots of people start second or third careers in their sixties but it’s a risky business and it takes time to build a career. Thanks to her financial settlement, Elizabeth didn’t have to contend with that. Here’s Elizabeth:
It was very amicable. I have a very generous alimony. We kept the house for a year and then he bought me out. It was all very mature and sober and there was nothing that we fought over. There wasn’t an item that we fought over. Basically I didn’t want to take anything from the house except for a set of chairs that I really liked that I had gotten from a craft show.
I had my own business. While my husband continued to be the breadwinner, my business has always been self supporting and we renovated a part of the house for my business. I contributed to the household.
My business had always been self-supporting but it would never support me. I never built it to that. It’s always been profitable, but it was never something that I would be able to put kids through college or anything like that.
The kind of work that I do, I can do I hope until I’m eighty or even beyond that. I would love that. It’s a wisdom-based business and so I only get wiser and more experienced and as long as I stay healthy, I’ll be able to do that.
I have a very generous alimony, which I negotiated with him and upon his demise, I believe I get his life insurance policy. I have to check on that. I’ve also built up a nest egg.
I’m very prudent about my money. The biggest question in finance today is at what age can we retire and what’s the number you have to have. Nobody has the answer to that. So, I’m prudent about it. I’m conscientious about putting money away and continuing to earn.
I don’t have any intention of retiring but there may be a day when the electronics and technology may become where I can’t learn another social media. I think my grand-daughter will keep me in the loop!
The generous alimony may have been partly from guilt but I also think that with a long-term marriage that I would get fifty percent of his income. In a long-term marriage that’s just a given. He was always the breadwinner. I raised the kids. I maintained the household. It was never written down. But there was no question in the judge’s mind that I was entitled to my amount of alimony.
I do think that if I had run off at some time in the marriage, he could be very vindictive. But, I think the fact that he did, that makes him very generous, to which I’m grateful. He was a very good earner and that he was financially very generous. So, what he didn’t give emotionally, he did give financially.
That doesn’t work for me. I’d much rather have the emotional connection. The man that I’m involved with now has very little financially and it’s fine. We have a great time together and it’s not about the money.
The Divorce Coach Says
Alimony can be a very contentious issue and especially for the person having to pay it. But as Elizabeth says, it goes back to decisions made earlier in the marriage.
When couples decide that one parent should stay home or work part-time, it impacts that parent’s earning ability and it can be a long term impact. There’s also an implicit, if not explicit agreement that the breadwinner spouse will provide financial support for the other spouse. That commitment doesn’t suddenly end with divorce.
I see alimony or spousal support as stopgap measure to help the receiver develop their career to the point where they can support themselves. If you have a financial agreement that gives you spousal support for five years, say, then you know you have five years to get to the position where you can support yourself. If a person is in their sixties, the reality is that there just may be insufficient time or ability to get to that point so temporary becomes on-going.
That’s all well and good but the other reality is that none of it matters, if the breadwinner spouse no longer has the income. What if they won’t pay, become unemployed, or worse, unemployable?
Clearly, the midst of divorce is too late to be thinking about how your decision to stay home with the kids will impact your career but it’s never too late to make a plan for financial independence nor is it ever too soon.
Bedrock Divorce Advisors is an excellent source of financial information for women experiencing divorce – the blog part doesn’t look like it’s active but founder Jeffrey Landers writes regularly for Forbes and there’s an up-to-date listing of his articles in the sidebar. They are also on Facebook.
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