The Financial Impact of Divorce at Retirement Age
Divorces are almost always difficult transitions. And, when couples at or near retirement age divorce, its impact on their finances can add to the challenge. However, careful planning with a knowledgeable divorce attorney can help people achieve the best possible financial outcome after divorce.
Although the overall divorce rate in the U.S. has remained relatively stable, older couples are divorcing at a much higher rate than ever - from 1990 to 2009, the divorce rate for couples over age 50 more than doubled, according to The Fiscal Times.
Distribution of Marital Property
When a couple gets divorced in Florida, the property and assets they have acquired during their marriage - as well as their debts - are classified as either separate or marital property, and the marital property is then distributed between the two people. The assets and liabilities are not automatically split evenly between the former spouses, though.
Instead, Florida follows a rule of equitable distribution, which states that the allocation should be fair considering several factors such as the contribution of each spouse to the acquisition of the asset and the contribution of one spouse to the personal career or educational opportunities of the other spouse.
Divorce and Retirement Benefits
Money accumulated in a retirement account like an IRA or a 401(k) after the marriage began is classified as marital property. Accordingly, any increase in the retirement account's value may be distributed upon divorce in Florida.
In addition, if the couple was married for 10 years or more, a former spouse may be able to receive Social Security benefits based on the other spouse's employment. However, a worker's Social Security benefits will not be reduced if his or her spouse or former spouse also receives Social Security benefits based on the worker's Social Security contributions.
Figuring out finances and an economic plan for the future after divorce can be complicated, but a skilled divorce attorney can help people through the process. If you are at or nearing retirement age and are considering divorce, contact a Florida divorce lawyer to discuss your situation.
