Divorce later in life is becoming more and more common. As Baby Boomers in Wisconsin are nearing retirement, many are finding that divorce is an unplanned part of their golden years. In fact, the divorce rate for people over the age of 50 has doubled, according to the National Center for Family and Marriage Research at Bowling Green State University.
Yet, divorcing after 50 can have a devastating impact on your quality of life if you are not careful with your assets. Many of the assets of those in the over-50 crowd are in retirement funds. These, if they are tax deferred, may drop in value when withdrawals are made because taxes will be taken out. Splitting the assets is challenging because of the need to consider these types of issues.
There are some ways to protect yourself from potentially devastating financial decisions. First, you need to be sure that you have legal representation and the advice of a financial planner during your divorce. Both of these will be an asset.
Next, avoid cashing in your retirement accounts during the divorce, if you can. If you make an early withdrawal, you will likely have to pay a hefty penalty. If there is some way you can divide your assets so that the retirement account stays intact, then you may be able to avoid these penalties.
Additionally, make sure you divide your debts in a fair way after your divorce. Pull a credit report on your spouse to ensure you know about all existing debts, even those who might be secret from you. After a lifetime together, it is only fair for the debts to be shared.
Source: Bakersfield.com, “Divorce misstep after 50 can be catastrophic,” Steven Van Metre, 5/13/2011
