Divorcing Retirees Face Unique Challenges
Divorce is stressful at any age, and each stage in life brings with it an assortment of joys and challenges. When a divorce coincides with retirement, there are some issues that can make it particularly difficult.
Balancing finances and retirement
If your divorce is occurring while you are nearing retirement, you may be concerned that as your new status brings with it new financial challenges, you may not be able to stop working, as you had originally planned. Instead, you may have to balance your retirement income against:
- Maintaining two homes instead of one
- Paying spousal support
- Paying child support
Retirement represents a step down in income for many couples and individuals, and the conditions of your divorce can greatly affect the disposable income available to you.
Dividing assets the sensible way
Statistics indicate that women traditionally have fewer assets available in their retirement than men, and divorced women have even less of a nest egg. One common error women make in divorce is trading the value of the home for retirement funds and other cash assets. A home is not guaranteed to increase in value, but it is nearly guaranteed to produce ongoing expenses.
Financial experts recommend that you sell your home when you divorce and divide all the cash assets in half, rather than trading an asset for a liability. Divorced partners can hold some retirement accounts jointly until they pay out, and others need to be divided right away. Be sure to explore which accounts carry penalties for early withdrawal if you need to fund your divorce expenses.
Modifying retirement choices
You might have been planning to relocate upon your retirement, and you may even own a specific piece of property for that purpose. Divorce can change many things, and it is important that you weigh your choices carefully. It is advisable that you meet with a financial adviser to review your financial situation postdivorce and prioritize accordingly.
Our divorce attorney is familiar with the issues that are unique to retiring couples, and he can be instrumental in helping you make sound choices at this time of change in your life. Contact Steven C. Weinstein for advice you can rely on.