These days, divorces among people over age 50 in California are not uncommon. Although older adults might be beyond concerns about how the end of a marriage affects young children, financial issues require extra attention. Retirement savings will likely be divided between departing spouses, which could delay plans of retiring.
Coming to terms with a former spouse about the division of retirement assets frequently creates conflict. To arrive at a fair agreement, a person should work with a financial planner to determine a post-divorce budget for basic living expenses and a new retirement savings strategy. Catch-up contributions allowed for people over age 50 could allow someone to rebuild savings after a divorce. The Internal Revenue Service grants older adults the ability to place an additional $6,000 into an employer-based retirement savings plan or individual retirement account.
A financial adviser might also describe how a divorce could influence Social Security benefits. A person married for over 10 years might have access to an ex-spouse’s benefits or need to delay retirement to achieve a higher benefit. A change in marital status for someone who is already collecting Social Security could alter the percentage of benefits that are taxable.
In addition to personalized financial advice, a person might gain important insights about divorce by consulting an attorney. A person could learn about rights to shares of real estate, business assets, investment accounts and retirement plans. Legal support could be especially important when a person suspects that the former partner is trying to hide money or deflate assets to avoid alimony obligations. An attorney may seek a full disclosure of marital assets. Legal guidance might help a person make effective decisions during negotiations or understand when litigating the divorce might be necessary to achieve an equitable settlement.