For many individuals, divorce can significantly alter their financial landscape, particularly in their late 50s. Michelle, a 56-year-old divorced woman, expressed her anxieties about rebuilding her financial life after her divorce finalized three years ago. The sale of the family home and subsequent division of assets left her with less than she anticipated, leading her to rent and question her ability to afford homeownership again on a single income.
Michelle shared her feelings of falling behind peers who are married, own homes, and discuss retirement plans. She grapples with the decision of whether to pursue buying a small apartment or avoid the potential financial strain of a new mortgage in her late 50s. This situation has left her feeling embarrassed and worried, as she never imagined starting over at her age despite a lifelong career.
Money educator Vanessa Stoykov reassures Michelle that it is not too late to pursue homeownership, acknowledging that rebuilding financially in one's 50s can feel confronting due to a perceived countdown to retirement. Stoykov advises against comparing one's financial situation to the curated highlights of others, emphasizing that external appearances often conceal individual financial pressures.
Stoykov suggests re-evaluating the definition of financial security, stating that homeownership, while providing security by eliminating rent, should not be the sole measure of success. She cautions that buying property out of obligation rather than necessity can create undue financial pressure. For those in their 50s, lenders scrutinize repayment plans as retirement nears, making obtaining a mortgage more challenging but not impossible.
Before making a decision, Stoykov recommends a thorough assessment of current retirement savings, potential growth over the next decade, realistic property costs, available deposit funds, and the impact of mortgage repayments on ongoing retirement contributions. The alternative of continuing to rent and prioritizing retirement savings and investments should also be modeled, considering potential future income, available government assistance, and ongoing rental expenses.
An experienced financial advisor can be instrumental in modeling these different scenarios, enabling informed decisions based on future financial implications rather than fear. Stoykov also stresses the importance of removing the stigma associated with renting, noting that divorce often changes financial trajectories, and the optimal next step may not be replicating a past lifestyle.
With an income, retirement savings, and years of work ahead, Michelle is in a position to make proactive decisions. Stoykov emphasizes that the goal is to build a secure, affordable, and fulfilling life, whether that involves renting or owning. Starting over at 56 and renting are not causes for shame; the priority is to make choices that ensure future options, confidence, and security.