• 29
  • September
    2011

Divorce can be an emotional and overwhelming process for many Denver residents. As a result, it is easy for individuals to lose sight of their future goals as they become consumed with negotiations regarding child support, child custody and property division. Many divorcees focus only on how a divorce will affect them in the short-term, but they must also remember to focus on planning for their long-term goals as a single person.

There is no doubt that divorce affects an individual financially, but it doesn't have to prevent one from achieving financial independence, especially during retirement. Today we will focus on some tips that can help the newly divorced to address their immediate financial concerns while also planning for a comfortable retirement.

After divorce, many Denver residents discover that they must make significant changes to their lifestyles in order to make ends meet. They no longer have the emotional or financial support from a spouse, and they may be forced to take charge of their finances for the first time. Since expenses stay relatively the same after divorce while one's income decreases, it is important that individuals create a new budget and plan to live below their means.

Saving for one's retirement is one of the most important expenses to include in one's budget. Many financial planners have noticed that the newly divorced are ceasing contributions toward retirement accounts in efforts to create more cash flow, but this is considered a huge mistake. Saving for retirement should never be compromised. Individuals should also take advantage of company match programs in order to build a substantial nest egg.

An emergency savings fund and long-term care insurance can also ease financial stress. An emergency savings account with enough money to cover three to six months of expenses helps to prevent individuals from having to access their retirement funds or monthly funds for unplanned expenses such as repairing a car or unemployment. Long-term care insurance also helps to ease some of the costs of home care without having to depend on relatives to help cover the expenses.

Although the number of issues that must be addressed during a divorce may be overwhelming, Denver residents can ease some of the stress by understanding the importance of taking control of their finances so that they can achieve financial independence as a single person.

Source: Daily Finance, "Retiring Solo: Too Many Singles and Divorcees Aren't Saving Enough," Catherine New, Sept. 14, 2011