Divorce for older adults influences retirement planning

These days, divorces among people over age 50 in California are not uncommon. Although older adults might be beyond concerns about how the end of a marriage affects young children, financial issues require extra attention. Retirement savings will likely be divided between departing spouses, which could delay plans of retiring.

Coming to terms with a former spouse about the division of retirement assets frequently creates conflict. To arrive at a fair agreement, a person should work with a financial planner to determine a post-divorce budget for basic living expenses and a new retirement savings strategy. Catch-up contributions allowed for people over age 50 could allow someone to rebuild savings after a divorce. The Internal Revenue Service grants older adults the ability to place an additional $6,000 into an employer-based retirement savings plan or individual retirement account.

A financial adviser might also describe how a divorce could influence Social Security benefits. A person married for over 10 years might have access to an ex-spouse’s benefits or need to delay retirement to achieve a higher benefit. A change in marital status for someone who is already collecting Social Security could alter the percentage of benefits that are taxable.

In addition to personalized financial advice, a person might gain important insights about divorce by consulting an attorney. A person could learn about rights to shares of real estate, business assets, investment accounts and retirement plans. Legal support could be especially important when a person suspects that the former partner is trying to hide money or deflate assets to avoid alimony obligations. An attorney may seek a full disclosure of marital assets. Legal guidance might help a person make effective decisions during negotiations or understand when litigating the divorce might be necessary to achieve an equitable settlement.