Retirement planning is a long-term endeavor that is not easy for many Illinois residents. It takes discipline and sacrifice and may not be without detours along the way due to unexpected expenses or periods of unemployment. If a couple makes it to the finish line and puts their work years in the rearview mirror, life seems good. However, that feeling of contentment can be shattered if the couple’s retirement leads to divorce.
In the not too distant past, if a married couple reached a certain age, a parting of the ways was almost unheard of. However, recent studies have shown that divorce rates for people over 50 have doubled in the last 30 years. This is significant from the financial aspects of a divorce because people in that age bracket have fewer years ahead of them to work than younger individuals or may already be retired. In many cases, resources to establish two households when previously only one existed can be strained, and the rules for splitting assets when at or near retirement age can be complicated.
Dividing pensions, IRAs and 401(k)s require both a solid understanding of the present value and the possible implications of the division. Social Security benefits for many are the primary source of regular income, and options exist for a former spouse to collect based on the higher wage earner’s benefits. Most importantly, the family home may be the greatest asset a couple owns. Issues regarding equity, present and future value, and the ability of either spouse as a single person to afford the expenses of living there are factors to be explored.
Divorce involves important decisions. A family law attorney may provide counsel on the legal issues and explain the rights and responsibilities of all the parties in moving forward.
