4 Strategies to Keep Divorce from Derailing Your Retirement

 Posted on February 21, 2020 in Divorce

The divorce rate for long-term marriages among senior citizens has nearly doubled over the last 20 years. The phenomenon has become so prevalent, in fact, that there are now societal terms for them, including “grey divorce” and “silver splitters.”

Unfortunately, divorcing as you near retirement can have serious financial consequences - and for some, the result could be devastating. Thankfully, there are some strategies that can be used to offset at least some of the risk.

1. Postpone Retirement or Re-Enter the Workforce

If you were planning on retiring - or have already entered into your retirement - and are planning to divorce, you may want to postpone or re-enter the workforce. One of the biggest reasons that later-life divorcees are at such great risk for loss is that they do not have as much time to recoup from the financial implications of divorce. Give yourself even just a few extra years and you reduce the amount of damage that a divorce could do to your financial standing over the next few years.

2. Give Careful Consideration to the Importance and Value of Marital Assets

Unless you can prove they were either gifted solely to you or were acquired before the marriage, most of your assets will likely be considered marital property. As such, these assets will be valued and then divided in an equitable fashion. Before you decide which assets you want to keep and which ones you want to go to your spouse, carefully consider their importance and value. Is the item worth the cost of maintenance (i.e. can you afford the upkeep and payments on your home)? Could some of these assets be sold to give you more liquid assets after the divorce? Remember that you have to think long-term - the rest of your life.

3. Roll Over Retirement Accounts Instead of Taking a Payout

If your spouse has a retirement account, it too may be split in the divorce. Rather than take a cash disbursement for your portion, consider rolling it over into your own retirement account. It is likely to have more value this way in the long-term, and you reduce the chances of a penalty for taking the cash disbursement early.

4. Maximize Your Social Security Benefits

If you are already in retirement and cannot return to the workforce, you may need to find other ways to bulk up your monthly income. One way to do this is to maximize your social security benefits. As long as you and your spouse have been married for at least 10 years, you may be eligible to collect against their social security benefits, rather than your own. In some cases, this may dramatically increase the amount of money you will receive.

Contact Our Wheaton Divorce Lawyers

If you are planning to file for divorce and are nearing retirement, contact Davi Law Group, LLC. Our seasoned DuPage County family law attorneys can protect your interests, and we will do everything possible to achieve the most favorable outcome for your situation. Schedule your personalized, no-obligation consultation by calling 630-657-5052 today.

Sources:

https://www.wsj.com/articles/the-divorce-rate-is-at-a-40-year-low-unless-youre-55-or-older-11561116601

https://finance.yahoo.com/news/5-ways-stop-divorce-wrecking-215033209.html