When emotions are running high and you are thinking about ending your marriage, it can be easy to forget the practical considerations to which you need to be paying attention. In addition to common concerns – such as child custody and child support – you need to be wary of the effect your property division agreement will have on your retirement funds.
When a divorcing spouse does not consider the serious implications of diminished retirement funds, he or she can be left in a precarious financial situation later in life, when recouping those funds can be next to impossible.
In fact, according to the U.S. Government Accountability Office, divorced individuals over the age of 65 are more likely to live in poverty than their married counterparts. In all, around 18 percent of the divorced women and 11 percent of the divorced men in the country who are over 65 years of age live in poverty – compared to 5 and 4 percent respectively for married individuals in that age group.
Women are also more likely to suffer financial hardship due to the division of retirement plans upon a divorce. Based on data from the Women’s Institute for a Secure Retirement, women tend to bring in around $10,000 less than men when in retirement each year.
Of course, the solution is obviously not to remain in an unhappy marriage. There are many ways that divorcing spouses can protect their retirement savings.
When going through a divorce, it is critical to consider not only the value of a retirement account at the time of the divorce but also the future value of the fund. Particularly in situations in which one spouse’s retirement savings are significantly greater than the other – such as when one spouse has stayed at home to raise a family or worked part-time – making sure you will be financially stable later in life is critical.
The most important step to take when you are wondering about your retirement savings while considering a divorce is to get in touch with a skilled family law attorney as quickly as possible. Negotiating the details of your property division agreement can be complicated and having a knowledgeable legal professional on your side will help ensure nothing is overlooked.
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