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Q&A: Newly Divorced and Worried About Retirement Savings

Q&A: Newly Divorced and Worried About Retirement Savings

November 29, 2023

CLIENT QUESTION:

I am 43, female, working as an RN, and recently divorced. Is it too late to start saving for my retirement years? I lost more than half of my retirement savings from my divorce. 

First of all, good for you for reaching out and asking this question! Many people get so worried about their retirement savings that they put their heads in the sand – and then they’re in real trouble.

The good news is that there are steps you can take now to get back on track!


Build Your Rainy-Day Fund

Build your savings account to pay for 3-6 months’ worth of expenses just in case the unexpected should happen. A great way to do this is to automate a certain amount to go into the designated savings account (something that you can access easily if you need it). That way you don’t even have to remind yourself!


Examine Your Cash Flow

How much is coming in and how much are you spending? It is crucial that you have a handle on this part of your life. Understand how much you’re saving and how much you’re spending. Balancing both is where you might find financial success. 


Understand Your Employee Benefits

“Benefits make up more than 30% of the typical job’s compensation, according to the U.S. Bureau of Labor Statistics.” (NerdWallet) In other words, it’s important that you understand all the benefits that are offered to you through your job – because it can add up.

One valuable benefit you might want to investigate is an employee assistance program (EAP). Here is how Indeed.com defines an EAP:

An employee assistance program (EAP) is a workplace benefit that provides employee counseling services to help overcome any personal or workplace challenges. The employees who enroll in the program, as well as the topics discussed, are confidential. Employees have the opportunity to work with licensed, professional counselors to talk about challenges that may affect their work performance. 

Issues EAP plans can assist your employees with include: 

  • Problems with substance abuse 
  • Debt or financial issues 
  • Health management 
  • Anxiety or mental health problems
  • Struggles with family or partners
  • Adjusting to a proper work-life balance

If a supervisor fears their employee’s job performance is declining, they will often recommend the employee use the EAP plan’s resources. If an employee partakes in the plan, the information will remain anonymous and won’t be shared with supervisors unless the employee allows it. Most EAP plans allow both employees and their family members to use the services offered.



Invest in Your Employer-Sponsored Retirement Savings Plan

If you haven’t done so already, it’s time to start putting money into your retirement savings plan. This could be a 401(k), 403(b), 457, or other employer option.

An important question to ask is if your employer matches any contributions to your account and what that match is.  In your case, at 43 years old, you are able to contribute up to $24,000 in 2024. Deposit as much as you can into this plan because the ability to save through pre-tax payroll deduction is convenient AND it means you pay yourself first, which is a valuable habit to start!

 

Think About Your Insurance Needs

Now that you’re on your own, it’s time to look at your insurance.

When it comes to life insurance, do you have enough money to pay off your debts, mortgage, kids’ college, etc. if you should pass away? How is your current health status? Are you insurable? If so, it’s important to get life insurance sooner rather than later.

You might also consider long-term care insurance, which can be helpful down the road with things like home health care and senior living.

 

I know that going through a major life transition means rethinking a lot of different areas of your life. It might be time to contact a trusted resource who can help you make informed decisions. Now that you’re on your own, YOU get to choose who you’re comfortable with as far as a financial advisor.

CLICK HERE and let me know how I can help!