Divorce rates among baby boomers have dramatically increased to one in four, up from one in 10 a decade ago. The trend of divorce among adults approaching retirement requires preparation and thought regarding financial matters.
Property division during divorce is sometimes not an easy task, but there are a few steps that can help make the transition to living single in mid-life and later years a little easier. Research published by Bowling Green State University shows that, while divorce rates sat at about 50 percent overall in 2009, baby boomer divorces increased, presenting the difficult issue of retirement funds gathered over a lifetime that must now be divided. Splitting these assets requires expert advice and financial planning with retirement perspectives in mind.
Sometimes dividing assets down the middle is not the best idea for either spouse. Tax laws and future financial needs should guide the decision for whether to accept a trade-off that could help protect the assets over time. Determine what you are entitled to from the marriage, whether it is cash, alimony or real estate. When you agree to property division in any state, including Florida, taxes owed on the asset could be an issue in coming years.
Experts agree that thinking with a lengthy perspective about financial planning can help maintain financial stability. Determine a budget according to the lifestyle you desire and protect yourself by closing all joint accounts and opening new ones with secured access. Review wills and insurance policies for needed changes. Focus on your needs for now and the future. Risk management plans can help ease the financial pain of divorce.
Source: Fox Business, “Graying divorces: What boomers need to know to protect their assets,” Andrea Murad, May 25, 2012