divorce affecting FIRE plans

[joesxm3]

So, a friend of mine called and told me that his wife was divorcing him and would be taking half of his pension.

This started me thinking. It would seem that a married couple has some economies of scale and shared infrastructure. The RE cash flow situation would not just be a 50% reduction for the single individuals.

I have to think that a person now operating with half of the combined assets would be worse off than when part of a married couple with 100% of the assets.

Have any of you experienced this?

Are any of you including this scenario in your planning?

I can see the argument that you would have gotten rid of each other before retirement age if you were going to, but these people are 60+.

 

[gauss]

Haven't experienced it personally but definitely agree with your conclusions. Tax filing as single vs. married also will further aggravate the situation.

Another time that a similar scenario arises is when a spouse dies. If both are drawing SS, then the surviving spouse will only receive the larger of the two checks.

-gauss

 

[Sunset]

Can't really plan for either one, I'm too optimistic

 

[bingybear]

The marriage is getting better.... so I'm not going to plan for the unthinkable.

 

[travelover]

Been there, done that. Got a prenup the second time around.

 

[RunningBum]

One would assume the alternative, to stay in an unhappy marriage, was worse than any financial hardship.

 

[W2R]

One would assume the alternative, to stay in an unhappy marriage, was worse than any financial hardship.

+1 Oh, you can sure say that again.

I am happily divorced, and have been so for 19 years. My observation is that divorce isn't pretty financially. When a couple gets divorced, usually neither one feels like they got half and at least in our case we both had to cut back to a much cheaper lifestyle.

Think about what kind of house or apartment you could get for half the price or rent, even if you DID get half, which you won't. No, seriously, go to realtor.com and figure out what you could get for your home. Divide that in half, and then subtract out a large amount from that for the costs of selling and moving. Then look to see what you can get for that much. Or, if renting just divide the rent in half and look at what you would be living in.

Divorce is a financial train wreck IMO.

There are a few financial advantages, though, even if you DON'T get half. Four advantages come to mind, and there are probably many more.
1) You don't have to buy the junk your spouse wants but you don't want.
2) Also, if you have the mindset of "I'd better spend this before my spouse spends it on his/her stuff", then you might spend less than before on yourself. Hope that makes sense.
3) It's a lot easier to save for retirement, because nobody is going to spend your savings on his/her hobby, collections, beer, etc.
4) You can LBYM to your heart's desire, without having to get your spouse on board with it.

 

[nun]

When I got divorced (20 years ago now) we split our regular accounts and the proceeds from the sale of the house which cane to about $40k each. We split household items by tossing a coin to see who had first choice then alternated until the items were too small to bother about.

My ex didn't want anything to do with the 401k balance (about $60k). Both her lawyer and myself tried to persuade her to divide it, but she just said I should take it....so I did. I rolled it into an IRA that's now worth $250k and I still have her as the beneficiary as that seems fair.

 

[Danmar]

One would assume the alternative, to stay in an unhappy marriage, was worse than any financial hardship.

Reminds me of a joke. Why is divorce so expensive? Because it's worth it.

All joking aside. Divorce can often be devastating from a financial perspective. I know this first hand. Left her at 42 with the clothes on my back and my career. She got the house, I paid her mortgages off over time plus a lot more. Still paying alimony that puts her in the top 1%.

But she will never be happy no matter how much I pay her, and I will never be unhappy no matter how much I have to pay her. Finding a "new" wonderful women has certainly helped.

Why are all these threads always about "friends" ?

 

[Chuckanut]

Divorce is certainly bad for the financial health unless one has a spouse who is a hopeless Spenderella, Prince Highlivin, drug addict or mentally unfit. Then the ongoing drain may be worse that a divorce that cuts one's losses.

One thing that hurts is legal fees. I know of people whose sole asset was their house and they basically lost that to legal fees as they fought over everything imaginable. Thankfully, both my ex-wife and I decided we did not want to enrich the lawyers. We split 50/50 based upon fair evaluations of our assets. If anybody came out a bit ahead of the other we figured that was probably less costly to both of us than legal fees, accountant fees, appraiser fees, etc.

My ex-wife did hook up with a guy who had much less asset wise than her, and as a result is still working while I have been retired for years. She also married him, so she can't collect on my SS record while allowing hers to build up to age 70. OTOH, I can and am collecting on her record. However, I would gladly give up the check to be married to a good woman. Some things money can't buy.

 

[haha]

+1 Oh, you can sure say that again.

I am happily divorced, and have been so for 19 years. My observation is that divorce isn't pretty financially. When a couple gets divorced, usually neither one feels like they got half and at least in our case we both had to cut back to a much cheaper lifestyle.

Think about what kind of house or apartment you could get for half the price or rent, even if you DID get half, which you won't. No, seriously, go to realtor.com and figure out what you could get for your home. Divide that in half, and then subtract out a large amount from that for the costs of selling and moving. Then look to see what you can get for that much. Or, if renting just divide the rent in half and look at what you would be living in.

Divorce is a financial train wreck IMO.

There are a few financial advantages, though, even if you DON'T get half. Four advantages come to mind, and there are probably many more.
1) You don't have to buy the junk your spouse wants but you don't want.
2) Also, if you have the mindset of "I'd better spend this before my spouse spends it on his/her stuff", then you might spend less than before on yourself. Hope that makes sense.
3) It's a lot easier to save for retirement, because nobody is going to spend your savings on his/her hobby, collections, beer, etc.
4) You can LBYM to your heart's desire, without having to get your spouse on board with it.

A very good summary. I separated at 60, divorced at 65. I wanted to stay married, so for me it was mostly pain.

Your summary of why one cannot live on half of two is right on. Another element for men is that dating costs money. No matter what anyone says, at least early on he is going to be buying more dinners, more drinks, more etc. than in his married days. Another thing is that in many splits, the man doesn't get half of what is left after costs and the attornies' levies. What is left after these may go in larger part to the lady. Divorce is a big financial risk. I am always amazed at how many guys sign up anyway.

Ha

 

[haha]

Why are all these threads always about "friends" ?

Unlike us, our friends tend to have bad luck with spouses.

Ha

 

[Texas Proud]

I have a prenup....

But, if I got divorced my expenses would go down by more than half... she has two kids that I would not have to feed or pay to go to college (one in there right now)....


Let's take the kids out of the equation.... she also spends much more than I do... I can live off much less money by myself... I was before we got married and can always go back to that lifestyle... not sure how many people can say this and mean it...

 

[kimcdougc]

My DH's saying is cheaper to keep her....! We knew each other 2 weeks and have been married for 38 years. Can't worry about something that I hope never happens.

 

[Dd852]

There are a few financial advantages, though, even if you DON'T get half. Four advantages come to mind, and there are probably many more.
1) You don't have to buy the junk your spouse wants but you don't want.
.

Junk? Harrumph. Everything I buy is a treasure. In my case, rather than divorce, DW got an art degree so she could declare with authority that every single antique I had my eye on was a fake! It has worked like a charm.

 

[JBmadera]

very timely, as I working thru this exact issue right now. on decent days of course I see that we can stick it out but on tough days the $$$'s just aren't worth it.

just last night I was looking at 1bd 1bt condos in fla, not great but only $40k and they are so small I'm guessing (hope) utilities can't be much.

brutally difficult to work thru.

as an aside my best friend's wife just divorced him, he's 73, and it has really crushed him. she told him she basically hated him for 30yrs but now that she can make it financially on her own (with 1/2 his pension) she's gone.

 

[ugeauxgirl]

I got divorced 20 years ago and for years was annoyed at how much I had to pay to get out of the marriage. It was right out of college- I had graduated debt free and he had come with a stack of loans- I got a job and he didn't. I found myself working 10+ hours a day and coming home to find him watching the Andy Griffith show, and drinking Corona beer. At that point I was paying his loans AND the beer. It didn't last long after that. I have come to realize that it was the best money I have ever spent- even if I hadn't met my wonderful husband I am far better off without that guy.

 

[HadEnuff]

When I got divorced I was only in my 40s. By the time the dust settled, her lawyer and NY State precedent pretty much gave her ALL of what we had accumulated. Not the 1/2 I thought she quite fairly should have been entitled to.
What I did find was that I could live quite well on the income I had left after child support. It was a huge factor NOT having her buy her stuff that I would not buy. Unfortunately I had to start over on the pension/ retirement plan (self funded)...but as far as my day-to-day expenses, I was OK.

 

[Amethyst]

I don't have much sympathy for people who claim to be "blindsided" after thirty years. Even if the lady was desperate to hang onto her meal ticket, she would need to be the best actress in history to keep actual "hate" a secret for 30 years. I'll bet, if he would be honest with himself, she tried during the early years to make him aware of the things she "hated" and it got her nowhere. That "meal ticket" arrangement can breed complacency on the ticket's part - "hey, he/she is taken care of, isn't that enough?"

There are divorces where a surprise is justified. But this particular instance doesn't sound like anything that an aware and caring spouse needs to worry about.

as an aside my best friend's wife just divorced him, he's 73, and it has really crushed him. she told him she basically hated him for 30yrs but now that she can make it financially on her own (with 1/2 his pension) she's gone.

 

[HadEnuff]

I got divorced 20 years ago and for years was annoyed at how much I had to pay to get out of the marriage. It was right out of college- I had graduated debt free and he had come with a stack of loans- I got a job and he didn't. I found myself working 10+ hours a day and coming home to find him watching the Andy Griffith show, and drinking Corona beer. At that point I was paying his loans AND the beer. It didn't last long after that. I have come to realize that it was the best money I have ever spent- even if I hadn't met my wonderful husband I am far better off without that guy.

Shortly after I went through mine, I was playing golf with 3 other guys, all of whom were fairly recently divorced. One of them said, "Do you know why divorce is so expensive? Because it's worth it."
Hard, and cold, but sometimes you just have to cut loose from the anchor you are trying to drag across the lake, and swim on your own. It turns out it's a lot easier to swim on your own than drag that weight.
But it's hard. Hard on everyone. Often hardest on those you love; kids, parents, siblings, close friends....

 

[JBmadera]

My buddy certainly wasn't blindsided, he willfully chose to ignore his spouse. working thru the issues with "wow, I messed up big time" is what is crushing him. In fact she actually gave him two years warning and he still didn't do anything.

 

[Amethyst]

OK, I assumed he felt blindsided. Now that you have explained further, I have even less sympathy! He is probably on the old people's dating sites already, looking for the proverbial nurse-with-a-purse.

My buddy certainly wasn't blindsided, he willfully chose to ignore his spouse. working thru the issues with "wow, I messed up big time" is what is crushing him. In fact she actually gave him two years warning and he still didn't do anything.

 

[JBmadera]

Yes, his behavior is the cause of his current suffering, but I still have empathy for him.

He and I were similar in that I think we both figured RE/FIRE would solve most problems and that is just flat out wrong. I should have put as much effort into my relationship(s) as I did FIRE if not more. Painful lesson - money can't solve all problems.

 

[Danmar]

No doubt the financials are an important aspect of divorce. But in the end it will often be the emotional factors that are the most important. I am still haunted by my 8 year old daughter holding on to me that night I left and telling me how much she loved me. Luckily our relationship survived and things have worked out very well, but for many it ends badly.

 

[dvalley]

Been there done that, set me back 10 yrs financially and like Ha I didn't want the divorce. I was still madly in love with her but she said 'I love you but not in love with you'. Then she hired a lawyer with a reputation and tried to take me to the cleaners. Even in my emotional state I was in on advice from close friends I fought back rather than rolling over and ended up with a 50/50 custody as well as 50/50 on the assets too. This happened when I was in my early 30s. Now that I look back I'm glad I fought back or I would've regretted not doing so even though it cost me a lot of money.

Now the current gf is getting antsy after 5+ yrs and wants us to tie the knot, I'm perfectly fine with being bf/gf forever but she wants 'to be married'. Financially we're pretty far apart even though she doesn't have any debt but very little savings. I'll be getting a pre-nup but that doesn't mean the future assets (since I'm in the accumulation phase) will necessarily be considered mine vs. community property. I hear pre-nups can be side-stepped fairly easily.