We are hearing a lot about the ABC reality show The Golden Bachelor and how older people are finding new love and new mates. Plastic surgery aside, these people are supposed to represent the new older generation of vibrant and active adults who have a lot of life still to live. Other than hearts, hugs and hot tubs, have you thought about how you are going to pay for your new longer love life?
Does age create financial wisdom?
Babies born today have more than a 50% chance of living to be over 105. If you are an older person, you are also expected to live longer than you may have thought. An American man who turns 70 today will live to be 85, on average, and a woman will live to 87, according to a study published by the American Journal of Public Health. This changes the landscape for the possibility of outliving your money. And we see this as 43% of people are scared that they haven’t saved enough.
Here is an example cited by USA Today: “Let’s say a man retires at 65 with $250,000 in savings. If he scrimps and spends it down at a rate of only $30,000 a year, the money might last him to age 73½. But longevity tables say he can expect to live another decade.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Retirement accounts such as 401(k)s are Americans’ largest retirement savings. The average 65- to 70-year-olds have saved around $186,000, according to Empower. But Fidelity has said that 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 in your 401(k), which is a far cry from reality.
The World Economic Forum and Mercer conducted a poll of people responding to the idea of living longer. The poll found that people really don’t understand the financial facts of later life and that there is a huge need for “longevity literacy.” This coincides with a Goldman Sachs survey that said that Baby Boomers are the least likely of all of the generations to be optimistic about their finances.
Finding love in all the wrong places?
The Golden Bachelor is inspiring many golden folks to look for love. New love is found for them in the old-fashioned way of being fixed up and just meeting people, but also on the internet. A Pew Research Center survey found that about one in six Americans over the age of 50 uses a dating site. Another Pew Research Center dating study found about 30% of adults over 50 are single and that 26% of those folks have tried to find dates on dating sites. Love can be one click away.
Ground Hog Day: Love and money
Nearly 45% of Americans 65-plus are single, according to the U.S. Census Bureau. These folks are not only widows and widowers, but many are also taking steps to remarry. But wedded bliss is not guaranteed. I want to point out that the divorce rate hovers around 67% for second marriages and 73% for third marriages, though not all of these are among older adults.
Gray divorce, or divorce over 50, is the latest phenomena in the world of divorce. In fact, the divorce rate for adults ages 50-plus has roughly doubled in the past 25 years, according to the Pew Research Center. This trend is led by women who don’t want to necessarily spend the rest of their lives in an unfulfilling marriage, and they are doing something about it. About 70% of divorces are initiated by women. (In fact, I’m writing a book about this, so stay tuned.)
The issue I want to address is that many older adults are not prepared for gray divorce financially, and if they are looking to couple up again, they may repeat some of the same financial mistakes that plagued them in their previous marriage(s).
Good and bad news
At least you don’t have to think about whether you want to have kids with your Golden Bachelor. And maybe you don’t have to worry about him being a bartender, where the divorce rate tops the average rate of 50% at 52.7%. Also, if you are financially set, your older partner’s educational background, religion, earnings and assets may be less of a consideration. You may just be looking for a companion with whom to share life and who hopefully doesn’t snore.
Psychology Today reports that you have to think about your budget when you consider getting married later in life. You also have to look at health considerations. Are you prepared to take care of your new spouse both financially and physically?
Financial infidelity: Protect yourself the next time around
You also need to come clean with each other about your whole financial picture. What are your financial obligations and income? Are you supporting adult children? These issues can hit you in the face if they come to light later. I fell into this trap with my later-in-life marriage. My husband supported his two adult daughters, who saw me as a financial threat. I’m financially independent, but that didn’t matter. Don’t fret, he got rid of me, and the kids are enjoying Daddy’s money. (Did I mention he divorced me via text? You will have to wait for the book to come out to hear this story!)
Consider a prenup
I recommend that older adults who are tying the knot again create a legally binding prenuptial agreement. This agreement will clarify what can get to be murky issues if there is a divorce. With a premarital agreement, couples agree on all financial matters before they say “I do.” But even though people know that divorce can get messy, and even support the idea of a prenup, just 15% of all married couples have one, according to The Harris Poll.
My other advice is to go into the next marriage with your eyes wide open. Try to make sure that you are financially protected, and here is an interesting aside: Stay away from friends who have gotten a divorce. Why? Because, according to a Pew Research Center study, couples who have friends who have divorced have a 75% increase in the risk of their own marriage ending.
Related Content
- Does Financial Fear Have You Spooked? Don’t Cower — Fight
- Are You the Worst Money Role Model for Your Kids?
- If You’re a Financially Insecure Older Adult, Start Here for Help
- Are You Rich? U.S. Wealth Percentiles Might Provide Answers
- Why Are You Still Working?
-
7 Things You Should Do Now if You Think Your Identity Was StolenIf you suspect your identity was stolen, there are several steps you can take to protect yourself, but make sure you take action fast.
-
Dow Hits New Intraday High: Stock Market TodayValue-hunters with big stakes in a particular component kept one of the main U.S. equity indexes in positive territory.
-
Thanks to the OBBB, Now Could Be the Best Tax-Planning Window We've Had: 12 Things You Should KnowThe new tax legislation offers unique opportunities to make smart financial moves and save on taxes, especially for people nearing or in retirement with significant savings.
-
Market Rebounds Are Happening Fast: Should You Buy the Dips? A Financial Planner's GuideMarkets are bouncing back faster than ever. For some long-term investors, that could mark a compelling case for systematic investing during downturns.
-
Asset-Rich But Cash-Poor? A Wealth Adviser's Guide to Helping Solve the Liquidity Crunch for Affluent FamiliesMany high-net-worth families experience financial stress because of a lack of immediate access to their assets. Liquidity planning aims to bridge the gap between long-term goals and short-term needs and avoid financial pitfalls.
-
Social Security Planning Strategies and Challenges as It Hits Its 90th Year: A Financial Adviser's GuideLonger life expectancies and changing demographics put extra pressure on the program, making it crucial for future retirees to understand its evolution, common myths and how to strategically plan for their benefits.
-
How to Build Your Financial Legacy Three Piggy Banks at a TimeA wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
