It is no secret that divorce can take a significant financial toll on those involved. The expense of divorce may be one thing. The biggest impact, however, can come in the separating of expenses and finances. In many cases, a divorcing couple may be moving from a two income household, sharing expenses, to a one income household carrying all the expenses. The transition can be difficult and will usually require careful planning and budgeting as everyone works on getting their footing under the new circumstances. For couples considering divorcing closer to retirement age, there is a whole other set of financial considerations that should be taken into account. As more and more people seek divorces in their later years, this topic becomes even more important to address. So, what should be taken into consideration when you are nearing retirement age and looking to divorce?
Consideration When Divorcing Near Retirement Age
It is not an understatement to say that a mid-life or later in life divorce can completely upturn retirement plans, especially when the financial impact of divorce is not properly accounted for. Think about it. When you’re closer to retirement age, you have less time in order to recover from the impact and losses involved in divorce prior to retirement. You have less time to pay off debt and less time to weather fluctuations in the stock market. While you get closer to the end of your wage and salary earning years, it can feel like a scramble to make up for financial hits with a steady paycheck.
Divorce, however, can be the fresh start many people not only want, but need. Getting divorced near retirement age can be the beginning of a new, brighter chapter. There are ways you can protect yourself financially when you are divorcing near retirement age, but it requires careful planning and execution. For instance, prior to divorcing, you should be knowledgeable about the financial situations of you and your spouse. Be aware of the assets you both hold jointly and separately. Get up to speed on the financial resources and liabilities that will be in play during divorce and after.
You should also consider whether or not you want to pursue the marital home in your divorce. Yes, a home can house memories and be a safe haven, but it can also be a financial liability. Take a hard look at the cost of living in the marital home and make a tough choice as to whether or not it is in your best interest financially to retain the marital home.
You should also be aware of the fact that retirement savings accounts can be subject to division in divorce if declared to be a marital asset. Keep yourself up to date about the status of your retirement accounts. You can get a copy of the Summary Plan Description from the retirement plan administrator.
Texas Family Law Attorneys
Are you nearing retirement age and considering divorce? Do not hesitate to reach out to the team at Navarrete & Schwartz to discuss your options. We are proud to serve the residence of Midland, Texas. Contact us today.