Your divorce will change many different areas of your life, including your financial stability and…
Divorce, Older Adults And Protecting Retirement
Kansas residents who are 50 and older might be more likely to get divorced than their younger counterparts, and they may be more likely to do so than others in their age group were in previous decades. So-called “gray divorce” has doubled since the 1990s, and although the rate is dropping overall, this is not the case among older adults. Unfortunately, because this age group is closer to retirement, there is less opportunity to recoup losses from a divorce.
Financial errors made during the divorce may compound these losses. For example, some people may make an emotional decision to keep the home. However, it could be difficult to pay for the mortgage and upkeep on a single income. Furthermore, a person’s circumstances could change after the divorce so the home is no longer affordable. Selling the home presents financial challenges as well since it may be necessary to pay for inspections and upgrades to prepare the home for the sale.
People might also fail to account for taxes and penalties on retirement and other types of accounts. For example, if a brokerage account is liquidated, there could be a long-term capital gains tax. For some retirement accounts, there is an income tax on every withdrawal. This means that these assets may be worth less than they initially appear.
However, when a person is going through a divorce, there might be other considerations during property division besides the financial ones. For example, a parent may decide it is best for the children’s stability to keep the family home for a while. People should still make certain their decisions are not jeopardizing their financial security. They might want to talk with an attorney about their goals and how they might protect themselves.