As more Georgia couples are getting a divorce when they are older, there may be some concern as to how the divorce settlement will affect their retirement plans. One or both parties may have to work more years than they had expected. Often after a divorce has been finalized, the parties just do not have the money coming in that they thought they would.
A recent study on marriage and finances found that those people who are divorced do not feel financially equipped to handle retirement as well as their married counterparts. The study also found that women who are divorced had saved substantially less for retirement than divorced men. No matter what the gender, everyone facing the difficulty of divorce may benefit from some financial planning before beginning asset division negotiations.
Choosing to take the house over other financial holdings is not always the best choice. A house will always have both routine and emergency expenses. Further, as the economy of the last few years has illustrated, the value of the home could decrease.
If a person is under 59.5 years of age, there is ordinarily a fee of 10 percent for taking an early withdrawal from a retirement account. With a qualified domestic relations order that gives an ex-spouse his or her share of the other party’s retirement account, that 10 percent penalty is waived. The problem could be figuring out how much to take out while it’s possible. Putting together a revised budget reflecting the monetary changes the divorce will bring may help a party to decide how much to take out.
Divorce can undoubtedly take an emotional toll on any couple. Older Georgia couples going through this difficult time have the added stress of realizing that they will need any financial assets received in the settlement to last for many years to come. Making wise decisions during the proceedings will help ensure each party will be able to save for his or her future.
Source: Forbes, 4 Divorce Mistakes That Can Derail Retirement, Marilyn Timbers, Aug. 21, 2013