Ending a marriage can be emotional and full of decisions or challenges at any age. When couples over age 50 divorce, they often face the additional task of supporting two separate retirement plans using the assets intended for their combined nest egg. If you find yourself in this position, the following steps can help you boost your savings so that you have enough money to last what could be decades in retirement:

  1. Take advantage of catch-up contribution rules. If you are employed and age 50 or older, current tax laws allow you to save additional money in your workplace retirement plan or IRA. Check IRS.gov or contact your financial advisor to learn the annual contribution limits for each account you own.
  2. Work an extra year or two before retiring. Every additional year you spend in the workforce means you have one more year to save for the retirement you want to have – and one less year to pay for. Many Americans are spending 20 to even 40 years in retirement, so the extra money you save can make a big difference on the amount you have to live on.

Secure a new or part-time job. If you’re retired or ready to leave your current role, re-entering the workforce in another capacity could help you generate additional monthly income. Whether you’re pursuing a dream job, side gig or consulting work, keep in mind that earning an income in retirement could affect your taxes or government benefits. Check the rules before returning to work.

  1. Delay claiming Social Security. Claiming Social Security benefits after divorce can be tricky. Bottom line: it’s worth exploring your options and choosing the best claiming strategy based on your full financial situation. If your former spouse earned a higher income, you may be eligible to receive benefits based on his or her employment record starting at age 62. In most cases, you may qualify if you were married for at least 10 years and you are still single. If you remarried, check the Social Security website to see if you are eligible (SocialSecurity.gov). If you decide to claim benefits on your ex-spouse’s record, keep the following in mind:
    • You may claim benefits even if your former spouse is still working. To do so, you must be divorced for at least two years.
    • The benefits you receive will not impact the amount your former spouse (and current spouse if he or she remarried) will receive.
    • If your ex-spouse passed away following your divorce, you may still be eligible for widow’s benefits. Check the Social Security website for eligibility requirements.
  2. Save your alimony dollars. Spousal support is more likely to be awarded when long-term marriages end. If you are awarded alimony as part of your divorce, consider using it to boost your retirement fund. Alimony is often granted with conditions, including the possibility that the payments will stop if you remarry, so keep those in mind as you plan for your future.
  3. Keep your retirement dollars invested. Amid a complex situation, it may be tempting to use your retirement savings to meet immediate financial needs. However, doing so could jeopardize retiring when and how you want to. Premature withdrawals from retirement accounts are an expensive short-term solution that triggers tax penalties and fees while reducing future retirement income.
  4. Seek advice. Assemble a team of professionals who can provide guidance on how to best divide assets and plan for your future. If you have friends or family who have gone through a divorce, consider asking for a referral. Enlist an attorney who can help you navigate the legal system (keeping in mind laws vary by state), advocate for your interests and update your estate plan. Also, consult a financial advisor and tax advisor for advice on crafting your retirement strategy.

Emotional turmoil brought on by divorce can make it hard to prioritize your finances, but there’s never been a more important time to make sound decisions. Even if you’re eager to move forward with your life, take the time to evaluate your retirement plans thoroughly. When you have significant assets or a complex estate to divvy up, there’s too much at stake to rush the process.


Andrew R. Petty, CRPC®, APMA®, is a Private Wealth Advisor with Marlowe, Petty & Associates, a private wealth advisory practice of Ameriprise Financial Services, Inc .  He offers fee-based financial planning and asset management strategies and has been in practice for 15 years. To contact him, please call 407-249-4006, visit his website at www.marlowepetty.com or stopover at his office at 10917 Dylan Loren Circle, Suite A, Orlando, FL 32825.

Ameriprise Financial and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.

Investment advisory products and services are made available through Ameriprise Financial Services, Inc., a registered investment adviser.

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