Getting divorced after 50 can have an enormous affect on your retirement.
Marriage and divorce can be messy topics from a personal perspective, let alone from a legal and financial perspective. This is especially true when your retirement or your estate are up for grabs.
When young marrieds split up, the biggest issue may be who gets the dog. However, when divorce happens later in life, it can present some truly unique challenges.
A recent Forbes article titled “4 Divorce Mistakes That Can Derail Retirement” is a good hip pocket guide to help you stay in the clear.
So, what is a divorce “mistake” that matters?
First, here is some perspective: you are dividing your life up at a time when your life savings are more than just a full piggy bank. There is more at stake than your dog. In fact, your life savings will be needed shortly to fund your retirement needs.
Accordingly, a late-in-life divorce mistake that will cost you is one that does not carefully consider the value and use of the assets you share, or the costs.
In brief, mistakes include:
- Blithely choosing the house over other financial assets
- Ignoring the tax implications of retirement funds
- Rolling a spouse’s retirement account directly into an IRA immediately after divorce
- Dipping too much into retirement savings because of the tax penalty waiver
Now, this list is really just the beginning. What about your estate? Effectively, divorce is also a threat to your current estate and future plans for it. Are you ready for half of it to disappear?
Reference: Forbes (August 21, 2013) “4 Divorce Mistakes That Can Derail Retirement”