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Embracing Stability: The Impact of Declining Divorce Rates on Retirement Planning

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In the realm of human relationships, the unfortunate reality is that many marriages in the United States end in divorce. On the bright side, recent data from the CDC indicates a positive shift in this trend. Marriage rates in the U.S. are on the rise while divorce rates are dwindling. This shift could hold promising news for the retirement plans of many individuals.

Two people holding hands while walking on a path.

Image source: Getty Images.

The Financial Benefits of Marital Stability in Retirement

While it is entirely possible to achieve a comfortable retirement as a single or divorced individual with a single income, the financial ramifications of divorce at any stage of life can complicate retirement planning. The decreasing divorce rates offer a glimmer of hope from a retirement perspective.

Divorce proceedings can be financially draining. Even in an amicable separation, legal and court fees can quickly accumulate. In a contentious divorce that drags on, the costs could be financially devastating. Moreover, the mere process of divorce might hinder individuals from contributing to their retirement savings for a considerable period.

In contrast, remaining married during retirement presents financial advantages, such as shared expenses like housing costs. Additionally, couples who stay married in later years often have dual access to Social Security benefits, enhancing their financial security.

Despite this, divorcees can sometimes claim Social Security benefits based on their ex-partner’s records. However, sharing that income with a current spouse could have significant benefits. Jointly married couples can also collaborate to optimize their entitled Social Security income.

Encouraging Trends for Financial Stability

Opting to remain in a stable marriage could pave the way for a more secure retirement. This does not imply that individuals should endure unhappy marriages solely for financial reasons. The key takeaway is the positive shift in declining divorce rates. At a time when numerous Americans are ill-equipped for retirement, having a financial and life partner could enhance the stability of this life stage.

If divorce seems likely before retirement, it is essential to make financial preparations. Boost personal savings to increase individual income streams and work towards higher wages to enhance Social Security benefits in the future.

Considering consultation with a financial advisor may be wise for those anticipating a divorce at retirement. Professional guidance can assist in navigating financial planning without a partner to share income and expenses.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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