30 Dec Divorces Throw a Wrench in Retirement Plans
You did a fantastic job of saving and planning for retirement, but what happens when you get divorced? This conundrum is regularly seen at the Law Offices of Jeffrey M. Bloom, and divorce before retirement gets more and more challenging the closer you get to your golden years. When you got married, you thought you’d have a long and healthy relationship well into retirement. However, life doesn’t always work out that way, especially in today’s era of relatively high divorce rates.
Divorce Can Change Your Retirement
If you’re a younger couple, it’s likely your retirement plans won’t be dramatically affected if you get divorced. The funds in your retirement accounts and pensions will probably get split unless you had a prenuptial agreement stating otherwise. You’ll still have years to continue saving and planning for retirement. But what if you’re mid-career or later?
In these cases, you may have to delay retirement. Again, unless you had a prenuptial agreement, your retirement accounts and pensions are considered marital property and will likely be divided. Splitting those funds affects both parties, no matter who may have contributed more. This means both parties will have to keep earning longer so you can build a bigger savings.
Living expenses in retirement as a single person will also be higher. Plus, you might have to pay child support or spousal support. This can mean paying premiums for your ex-spouse’s healthcare or disability insurance. If your children are still minors, custody issues can dictate where you can live and retire. If you had planned to retire in an area with low cost of living but now need to stay in Hackensack, that’s a big difference when it comes to costs. Minor children are also entitled to your social security benefits, so it’s paramount that you understand who gets these payments as connected to your earnings.
Protect Your Assets – Call Today
Many divorcing couples may benefit from a domestic relations order or DRO. This can help you bypass penalties and taxes that are normally linked with retirement funds. However, this is just one potential strategy. Every couple and divorce is unique, and you deserve an expert divorce attorney to help make this stage of your life and retirement as smooth as possible. To schedule your consultation with the Law Offices of Jeffrey M. Bloom, call 855-208-3650.