Divorce can be difficult at any age. Regardless of the circumstances that may have lead to a marriage's demise, dealing with the emotional and financial implications of divorce may prove to be challenging. This is especially the case for individuals who are nearing or in retirement. Gone are the days when marriages that survived the five or 10 year mark were considered nearly divorce-proof. In fact according to the National Center for Family & Marriage Research, the divorce rate "among adults 50 and older doubled from 1990 to 2010."
Individuals nearing retirement often have a limited amount of time in which to earn income and those in retirement are likely already living off of retirement assets like a 401(k) or Roth IRA. When an individual age 50 or older divorces, he or she is faced with the challenge of figuring out how to afford current and future expenses associated with retirement costs. In cases where an individual's retirement plans revolved around the retirement assets of a soon-to-be ex-spouse, it's important to make smart and strategic moves when negotiating a divorce settlement.
For mothers who never worked or stayed home for years to raise children, surviving on one's own retirement funds is likely not an option. In most states, including California, retirement assets can be divided in a divorce settlement. For older individuals who are going through a divorce, it's important to understand the real vs. perceived value of different retirement assets as well as the potential implications of choosing to keep a home or requesting alimony.
Securian Financial Group recently surveyed 546 divorcees who were married for at least 10 years. Of those polled, 25 percent admitted to not knowing enough about the division of retirement assets. A divorce attorney can help an individual discover unknown assets as well as assets a spouse may be hiding. Once an individual has a comprehensive financial picture, a divorce attorney can also answer questions and provide advice related to the division of these assets.
In our next blog post, we'll continue to discuss this topic and look at specific examples related to the division of assets that particularly impact divorcees age 50 and older.
Source: Forbes, "The Big Money Mistake Divorcing Women Make," Kerry Hannon, July 3, 2014