Statistics Canada Shows Seniors’ Divorce Has Significant Financial Toll
Data from Statistics Canada shows that the divorce rate of people between the ages of 55-59 has been steadily increasing since 2005, and the decision to divorce has had a significant impact on the retirement plans of some Baby Boomers. The data also revealed that women within this age group are the ones most affected, financially, by divorce. StatsCan found that the both the median family income, and median individual income for divorced women between the ages of 54-80 was significantly lower than than the median incomes of women who had remained married.
Darren Gingras, president of the Common Sense Divorce, hopes that his company can guide Canadians through marital breakups. When divorces occur post-retirement, the parties involved are unable to recoup their losses as they could have when they were 30-40 years old.
Shaun Goolcharan, with Sun Life Financial Inc. says that he advises all of his clients, to reconsider their priorities and life goals –such as retirement– before they file for divorce. According to Goolcharan, the impact of divorce resonates beyond its emotional impact; it forces people into major decisions regarding all aspects of their current finances.
Author, and two-time divorcée, Gail Vaz-Oxlade argues that people need to treat marriage breakdowns as they would any business decision. “You can’t let your emotions run away from you,” she cautions. According to her, decisions like keeping the family home in exchange for retirement assets must be realistic –holding onto emotional attachments without first considering the implications of those attachments can leave divorced seniors with little financial stability in their later years.
According to Ted Rechtshaffen, president of TriDelta Financial, one major issue faced by divorcées, over the age of 60, is tax related. When income taken from an RRIF is unevenly split due to a divorce, a person can end up paying $3000-5000 more in tax than they were before. In addition to the added tax burden, Rechshaffen says that the biggest financial challenges in divorces is the cost of living alone. “Your expenses are now 150% combined,” he claims.
The issue of splitting RRSPs is not a complex one, according to Raymond Leclair, the VP of public affairs for Lawyers’ Professional Indemnity Company. The Income Tax Act allows for a rollover of property in the event of a divorce, provided that certain requirements are met. RRSPs can be transferred from one spouse to the other and the taxes will be deferred until the recipient withdraws the funds.
Edmonton Divorce Lawyers Can Help You Build a New Life
If you are over the age of 55, and are planning to file for divorce, you are facing a unique set of challenges when planning to secure your financial future. The experienced divorce lawyers at Slaferek Callihoo are here to advise you as you make your decisions regarding issues like property agreements, or division of pension. Let our trusted divorce lawyers help facilitate your transition into a new phase of your life.