I was having coffee with a buddy the other day and we were discussing a lot of things that are going on around us, when we touched on an observation that we both have made over the years. We are both in retirement, we do not have a 1st mortgage let alone a 2nd mortgage, we both have long term marriages and we have only been married once.
We were discussing how a number of friends of ours are on their 2nd or even their 3rd marriages. They are still working. Some even have young children from these 2nd and 3rd marriages which they have to support. They are around the same age as us and will be working for some time. One of the reasons that they are still working is the fact that they had to pay for expensive divorces.
Even if there was no contest of the estates, and the settlement was 50-50, there still is a huge impact on the savings and retirement pensions of these people. They had to purchase another house to live in and make payments on a new mortgage. They lost the equity in the first home they bought and so on. There may examples like this that contribute to a negative financial situation for the person that is remarried.
They simply do not have the ready cash and savings that many other people have who have not separated. In addition two people are always better than one when it comes to paying for lodgings such as homes, condos and apartments. This is true whether you rent or own your own place.
Getting remarried is not all bad. If you marry someone who has a job and can support herself or himself, you now have two incomes to split the bills with and pay for the extra things that we all like to have. The net though is really what you spend on legal fees fighting the settlement and support costs that are incremental to what you would have normally spent supporting your estranged spouse or children. Avoid paying extensive legal fees if you can.
Let’s face it , when you spend money on support for the family when you are married, it is spent usually a lot more efficiently than when you are separated. Sometimes when there is animosity between the parties, people tend to be a little more free spending their ex-spouses money than they normally would. They also try to win the kids affection by buying more expensive gifts and lots of them. Instead of being together they compensate with gifts which costs a lot more.
Retirement and paying mortgage payments in this situation is very difficult for many people. Consider that your friends are out on the golf course. Or traveling while you are still working because you had to start over with a mortgage and payments due to a divorce. Note that we are not suggesting consumers should stay together due to the financial issues. Rather we are trying to ensure that consumers are aware of the long term financial impacts when a divorce takes place. In addition to all of the other issues that they need to deal with during a divorce.
Many of our friends who are the same age as us and retired are in a better situation that those people who are dealing with divorce and 2nd marriages. We are not suggesting that people should stay together because of these issues. If the marriage is not working then you may as well move on. Always have an eye on the long term goal of where you want to be when you retire.
In our next post we will look at some of the areas that cost more. Why do our buddies really need to continue working to support themselves into retirement as well as their estranged families.
We would like to hear your comments and let us know if you agree or disagree with our comments.