Image: Alex Nabaum
Death, divorce, diagnosis, disability—one crisis can torch your finances overnight. For women over 50, resilience isn’t a buzzword. It’s the difference between stability and starting over.
Hope Reger, 53, got a call that is every mother’s worst nightmare. Her son was murdered by his roommate. One minute, she’s planning for the future. Next, she’s planning a funeral, riddled with grief, and scrambling to cover funeral costs (which are not cheap).
One life-altering event—death, divorce, disability, or a diagnosis—can torch your finances overnight like one of the Four Horsemen of the Apocalypse. All your plans go up in smoke. Your retirement fantasy? Poof. Gone. Your financial security? Hanging by a thread.
Getting back on track isn’t about cutting out lattes or clipping coupons, either. It’s about survival mode and fighting tooth and nail for your security and sanity. The good news: You can get back up again and you’re more resilient than you realize.
Dealing with Death
Spoiler alert: Everyone dies. We all know that. But it’s convenient to forget when you want to enjoy life. You expect some deaths, but other times, death is an unexpected tidal wave. In Reger’s case, the nearly incomprehensible death of her son left her hollow. After a lifetime of caregiving, Reger had to grieve not only her son but also her role.
“Was I going to sit in that darkness and … just give up? Or was I going to get out of bed and start to do something? I call it my devastation to determination period, and I had to figure out what all that meant,” she said.
Death, whether of a spouse, partner, or child, can be a gut punch to your finances. The funeral costs. Potential loss of income. Inability to work or focus. But it’s not the only ending to torch your finances. A divorce can also send shock waves to your financial stability.
Divorce: When Starting Over Starts With Zero
You’re in your late 50s and getting a divorce. Suddenly, you’re single, and you get sticker shock at the price of starting over. Jaw-dropping housing costs. Skyrocketing health insurance premiums. And treating yourself? Might as well stay at home with Netflix. You went from double the income, double the fun, to single with dwindling savings.
Divorce can feel life-ending, but this isn’t the time for a pity party. Wipe your face, put on your big-girl pants, and protect yourself. First, know what’s yours. List bank accounts, assets, and any benefits you have a claim to. Don’t let your ex or the court take the reins.
Open a bank account in your own name. Take your ex off every beneficiary line you can find. Then hire the sharpest divorce lawyer you can afford and a smart financial pro who’s helped women in your exact position. If you’re at Social Security age, check whether you can claim benefits on your ex’s record—because why leave money on the table?
But before you raid your retirement accounts, be aware of potential consequences. “One of the common mistakes that you can make in a divorce is maybe there’s a large IRA and you decide, ‘Oh, I’m going to take out some of this money because I need it.’ You’re going to have a 10 percent tax penalty if you’re under 59 and a half,” said Roxanne Alexander, Wealth Manager and Principal at Evensky & Katz/Foldes Wealth Management.
And like divorce, disability can also strike without warning and carry equally devastating consequences.
Disability Doesn’t Ask Permission
You think it won’t happen to you. And then it does. You’re living with a disability—and you’re far from alone. Currently, 28.7 percent of adults in the U.S. have a disability. While you might be dealing with enormous physical and mental challenges, now there’s extra financial stress, too.
Immediately look into Social Security Disability Insurance (SSDI). If you qualify, apply. If you have disability insurance from your employer or from a private company, file a claim right away.
But be aware that benefits don’t kick in immediately. “If you do have disability insurance, there’s usually an elimination period where you’re going to have to take care of yourself for a few months,” said Alexander. A disability can change your life overnight—and so can unexpected illness.
A Diagnosis That Detonates Everything
The gut punch of hearing you have a serious malady can turn your world upside down. You could be fighting for your life and to stay financially afloat.
Now’s the time to get into the nitty-gritty with your health insurance coverage. Check sick leave or short-term disability benefits with your employer. And here’s an uncomfortable truth: The unfortunate reality is that a good chunk of people who struggle with medical expenses file for bankruptcy.
Though it’s often a last resort, it is an option. Yes, it will appear on your credit report. No, it’s not forever. It will be there for seven to 10 years, depending on the type of bankruptcy. While your finances are important, getting better and managing your health should be your main priority. A diagnosis can be scary. But researching your options and getting your finances together can help you limit additional stress—so you can focus on healing.
How to Rebuild When the Bottom Drops Out
After any of the Four D’s, it’s tempting to flirt with despair. Don’t. At some point, you have to get up and start again. You might take a blow to your income. Have new expenses. Less money for non-essentials. Your life might not look like you wanted—but it’s a chance to start over.
Reach out and find community. Ask for help. Use each and every resource you can get your hands on. Because while you can’t control if or when one of the Four D’s strikes, you can control how you choose to rebuild.
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The information provided on PROVOKED is for general informational purposes only and does not constitute financial, legal, tax, or investment advice. SFD Media LLC and its contributors are not licensed financial advisors, investment advisors, brokers, accountants, or attorneys. You should consult with a qualified professional before making any financial decisions based on this content. While efforts are made to ensure the accuracy and timeliness of the information, SFD Media LLC makes no representations or warranties, express or implied, regarding its completeness, accuracy, or applicability to your individual circumstances. Reliance on any information from this site is solely at your own risk and discretion.
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