As an increasing number of older couples are joining the Grey Divorce movement, bigger questions are arising about finances and property division. Not only are older couples more likely to simply have more assets; they are also more likely to possess a wider variety of holdings that could make a property division process particularly difficult. If you are over 50 and seeking a divorce, there are a few things you should consider in order to protect your retirement accounts and other long-term holdings.
As an older divorcee, you only have 10 to 15 years until retirement becomes suddenly relevant. This means you must take a different approach to divorce than those couples in their 30s or even 40s. First, remember that you should not automatically choose to take the family home in the divorce. There may be better options that could provide you with a more flexible and liquid financial portfolio. A house’s value is not set in stone; in fact, these prices can vary widely. Even selling your home to downsize is unlikely to fund your retirement. Actual cash assets will be a better choice for most older divorcees.
If you are awarded a percentage of your spouse’s 401(k), think twice before you put it all into an IRA for yourself. This is one of the few times that you will be able to access your retirement funds without penalty. Even though you want to reinvest the majority of your money, you may be able to use some of these funds for unavoidable divorce expenses.
Lastly, resist the temptation to withdraw extra money from your retirement funds during your divorce. Cover your legal and associated costs, but leave the rest of the money for your future retirement. You will need your nest egg if you expect to retire as planned.
If you have questions about your Maryland property division process, consider seeking the advice of a qualified family attorney. These professionals can help you obtain the resources you need during and after your divorce.
Source: www.nydailynews.com, “Money pros: Don’t let divorce rip apart your retirement nest egg” Marilyn Timbers, Aug. 14, 2013
