Divorce and Retirement Plans
Many things change when individuals go through the process of divorce. One of those things is the finances. While the focus can be on daily expenses, it is also helpful to plan for the future and understand a divorce can impact retirement plans, too. According to a Center for Retirement Research at Boston College study, “households with a past divorce are much more likely to be at risk for maintaining their standard of living in retirement.”
To be sure you are protecting all your assets, it is important you work with an experienced Bucks County family attorney. When you understand the impact of divorce on your finances, including retirement plans, you can adjust accordingly.
How Does Divorce Affect Retirement Savings?
When you are in the middle of a divorce, it is natural to be paying attention to the immediate impacts. Financially, that includes legal cost and how assets will be divided. Many do not give retirement planning the attention it deserves in the best of times, so it makes sense it would not be top of mind when individuals are going through a life-changing divorce.
But there are ways to consider how your expenses after a divorce could impact your ability to save for the future. For example, if a larger portion of your income will be allocated to living expenses, it could hinder your ability to save. This could be especially true if you will be paying child support or spousal maintenance.
There are other shifts that could occur as well. Individuals who were bringing in the majority of the income for the household may have had advantages to filing taxes as a married couple with a large income. That amount of taxes paid might change when filing as an individual. Or, if you were hoping to delay selling a property until retirement so it could accrue in value, it might be a financial pressure to sell a home earlier than anticipated as part of a property division.
All of the items can setback a retirement plan that had been put in place. Thinking these items though before a divorce is final may help in finding a way to align things in favor of your retirement goals. A Bucks County family attorney can help.
Social Security Benefits Are Connected to the Length of the Marriage
If you will qualify for Social Security benefits connected to your ex-spouse’s income depends on how long you were married. If the marriage lasted for 10 years or longer, you will be eligible for benefits that align with their earnings. This is only a possibility if the marriage was a decade old or older before the divorce was finalized.
If you are worried about how the divorce process will affect your retirement savings, talk to the experienced divorce attorneys at Kardos, Rickles & Hand. Let our lawyers take care of all the technical aspects of your divorce and help you move forward with the rest of your life. Schedule your consultation today, call 215-968-6602.