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What about the mortgage?

Before you start worrying about retirement, you’ll need to deal with the present — and your biggest worry might be your mortgage. If you have a joint mortgage, you might choose to sell the house and split the proceeds with your ex. From there, you can move to a smaller, more affordable home.

If you don’t want to sell the house, one spouse could buy out the other and refinance the mortgage in their name (and update the house title). If you don’t have the money, you could turn to a home equity line of credit (HELOC), which is a revolving credit line determined by the value of your home and your credit score, but there are very serious risks involved.

Some divorced couples come up with an arrangement where they continue to share mortgage payments while taking turns living in the house (say, for one week at a time) to make the transition easier on the kids. This, of course, is probably only a good idea if the split is amicable — but even then, things could get complicated down the road if one or both parties finds a new partner.

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What about your retirement?

If you’re 45 with little to no savings, you’re not alone.

You still have time to turn things around, although it’s not necessarily going to be easy.

First, figure out how much you’ll need to live comfortably in retirement.

Next, assess how much money you’ll receive in retirement. For instance, will you receive any pension income or share in some of your ex-spouse’s? Will you receive any other income from your spouse, such as alimony? While you may qualify to receive Social Security benefits on your own record, you could also qualify based on your ex-spouse’s benefit if you were married at least 10 years before divorcing. You will receive the higher of the two benefits for which you’re eligible.

According to the Social Security Administration website, “You can apply for benefits on your former spouse’s record even if he or she hasn’t retired, as long as you divorced at least two years before applying. If, however, you decide to wait until full retirement age to apply as a divorced spouse, your benefit will be equal to half of your ex-spouse’s full retirement amount or disability benefit.”

Once you build an emergency fund, you’ll want to start investing as soon as possible, since building a substantial nest egg is going to be hard work after 45. You can use this calculator to determine how much money you need to contribute each month to your account in order to arrive at a specific savings goal. Make sure your portfolio is well diversified and your asset allocation is suited to your time horizon.

Finding extra money in the budget to invest for retirement can be challenging for a single parent with two kids, so you may have to make a few sacrifices, like restricting takeout to special occasions. You’ll also want to pay down any expensive debt.

If your employer offers 401(k) matching, ensure you make use of this perk — it’s like getting free money for your retirement.

Getting divorced, especially when kids are in the picture, can make you feel like your retirement goals — and your ability to support your children — are out of reach. But with some planning and discipline, your retirement dreams won’t be destroyed.

What about the kids’ education?

Hopefully, your ex will pitch in for the kids’ education. If not, you could turn to your parents or even your ex’s parents. If you can afford to in the future, and you're confident you're on track for retirement, you may want to consider opening an education savings account, or 529 plan, to help fund your kids’ college.

The funds in this tax-advantaged account are used solely for qualifying educational expenses (such as tuition, books and room and board). You, your ex or a grandparent can open an account, with your child as the beneficiary. It may not be enough to fully cover their education, but your children could still be eligible for student aid, including scholarships and loans.

And they may be able to benefit from the “grandparent loophole.” When a student applies for financial aid, they need to fill out a Free Application for Federal Student Aid (FAFSA) form. Previously, if they received income from a grandparent-owned 529 plan, it had to be reported as untaxed student income — and that could reduce financial aid eligibility. Now, however, grandparents can gift money to a student without impacting their ability to receive financial aid.

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Vawn Himmelsbach Freelance Contributor

Vawn Himmelsbach is a journalist who has been covering tech, business and travel for more than two decades. Her work has been published in a variety of publications, including The Globe and Mail, Toronto Star, National Post, CBC News, ITbusiness, CAA Magazine, Zoomer, BOLD Magazine and Travelweek, among others.

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