Ending your marriage is scary. Ending your marriage when you are close to retirement can be even scarier. “Gray divorce” is the term that has been popping up in the media which refers to people who divorce after the age of 50. According to the National Center for Family & Marriage Research, the divorce rate among adults over age 50 doubled between 1990 and 2014. For those over 65, the rate has nearly tripled. With the amount of time before retirement limited, and earning capacity unlikely to significantly increase, these couples face different challenges than those who divorce earlier in life. Will this change your plans for retirement? Can you keep your family home? How will you split your assets and address any debts? These are all questions that may be racing through you mind during this emotional time.
Having a limited amount of time to recover from a financial change, such as divorce, makes it imperative that you have the right team in your corner. Hiring a divorce attorney may not be enough. Consider also hiring a Certified Divorce Financial Analyst® (CDFA®). A CDFA® can work as an objective third party when it comes to reviewing your financial situation and can provide clarity in this time of uncertainty.
Amy Weldele, CFP®, CDFA® is a Senior Wealth Manager at Budros, Ruhlin and Roe. She specializes in helping individuals and couples who are going through a divorce. When it comes to dividing retirement accounts, the courts must address all retirement accounts including 401(k)s, pensions and IRAs.
“Many make the mistake of assuming their divorce settlement will fully address their portion of their spouse’s retirement account,” says Amy. “It’s critical that a qualified domestic relations order (QDRO) is prepared for the appropriate type of retirement plan account, which instructs your former spouse’s plan administrator on how to pay your share of the plan benefits,” she added. “Post-divorce, make sure you update all of your beneficiary designations and revise your estate planning documents.”
Aside from dividing retirement accounts and other assets and liabilities, another important piece of the puzzle to look at is living arrangements. Will you sell the marital home? Who will stay and who will make other arrangements? Does one spouse provide all the household income? If so, will the non-working spouse receive financial support? It’s a big adjustment that takes consideration and time to get used to. Working with someone who understands the financial ramifications of your situation can go a long way towards making decisions that are in your best interest.
After the dust has settled, it will be critical to establish short and long-term financial stability. Working with a Certified Financial Planner™ (CFP®) can help make sure that you are taking the right steps to plan for financial security into your retirement years.
Visit https://www.b-r-r.com/specialized-services/divorce-advisors/ to learn how Budros, Ruhlin & Roe can help you navigate your divorce.