Divorce and your Retirement Savings
Even the most amicable divorce is an unhappy experience for those involved, but when you consider the impact of divorce on your retirement savings things become even more difficult. Although superannuation is technically treated as property during divorce proceedings, most people considering how to split their assets and lives don’t give their retirement savings much thought. This is understandable – after all, most divorcing couples having things like children, homes and joint bank accounts to consider. But neglecting to consider the impact of divorce and your retirement savings can have long term negative consequences.
Generally speaking women are hit harder than men by the loss of superannuation after a divorce, even more so for women with children. This is because women are more likely to choose the family home over a share of their partner’s super in order to keep their children’s lives as stable as possible and because it’s where they feel most comfortable. Unfortunately this choice can add years onto a divorcee’s working life and mean much tighter budgeting in the short term.
Most people don’t plan on getting divorced. However there are some simple precautions anyone can take even before they decide to marry or start a family. Ensuring your super is consolidated, not spread across a number of accounts from different jobs, can make a real difference to the interest your retirement savings are collecting. While you don’t have the financial responsibility for a family it’s also a good idea to make additional contributions to your super account. This can either come from after-tax contributions or salary sacrificing.
The average age of men going through a divorce is 45, while for women it is 42. If you find yourself in this situation without having taken precautions earlier in life, take your retirement savings into account when discussing the divorce settlement. It is best to consider your options with a professional lawyer or financial expert to be sure you’re getting a fair division of superannuation and other assets.
If you need advice on divorce and financial assets, the experienced lawyers at The Quinn Group can help. Call us on 02 9223 9166 or submit an online enquiry.