Financial Factors of Later-in-Life Love
Financial Factors of Later-in-Life Love = newsletter 2-26-24
Financial literacy writer Neale Godfrey, in an article for Kiplinger Personal Finance, cites a poll that found people do not adequately understand the financial facts of entering into relationships later in life, and they need to have improved “longevity literacy.” Godfrey notes, for instance, that Americans as a whole have underfinanced retirement to begin with, and divorce or remarriage can potentially complicate the fiscal picture even more. He asks: “Have you thought about how you are going to pay for your new longer love life?” Pertinent statistics he cites include the following: • An American man who turns 70 today will live to be 85, on average, and a woman will live to 87, which affects the possibility of outliving your money. • The average 65- to 70-year-olds have saved around $186,000 in retirement accounts, but financial experts say your retirement account at age 67 should equal about 10 times your annual income. So if you make, say, $62,000 a year, you should have $620,000 for your retirement. • Divorce would obviously affect both parties’ retirement finances, and remarriage raises the question: Are you prepared to take care of your new spouse both financially and physically if that became necessary? • The U.S. Census Bureau says close to 45% of Americans aged 65-plus are single, with many interested in marrying or remarrying if widowed or divorced. Pew Research has found that about one in six Americans over the age of 50 uses a dating site. • As for divorce and remarriage numbers, Pew says the divorce rate for adults aged 50-plus has roughly doubled in the past 25 years. Plus, the divorce rate is roughly 67% for second marriages and 73% for third marriages (these rates are for all ages). Godfrey contends many older adults are not financially prepared for “gray divorce.” His advice for anyone considering marrying or remarrying late in life: Come clean with each other about your financial picture, and create a legally binding prenuptial agreement.