For many Alabama spouses, one of the most pressing concerns about ending their marriages involves how their decisions will impact retirement plans. This is an understandable concern, as statistics show that divorce can have a number of consequences for an individual's ability to retire as planned. Understanding how the financial aspects of a divorce may play out in the years to come can help spouses make wise financial decisions during and after divorce.
Research suggests that the divorce rate among young Americans has declined. However, when it comes to people over the age of 50, divorce rates are double what they were in 1990. Overall, it is estimated that around half of all marriages will end in divorce. When an individual is at or nearing retirement age, the financial repercussions of a divorce can be far more difficult to overcome than when someone is in their 20s or 30s.
While considering property division options, older spouses should keep their retirement planning at the forefronts of their minds. Different types of assets have different financial stipulations, and even though the "value" of two assets may look the same on paper, they may have very different levels of liquidity, risk or maintenance costs. When entering property division negotiations, it is important to be well-informed about how each asset is valued and may be taxed, as well as how the asset fits into one's overall retirement strategy.
By taking a careful approach, Alabama residents can create property division settlements that are in line with their current and projected budgets. That can make retirement far easier to manage. It should be noted that research also suggests that remarrying after a late-life divorce can vastly improve an individual's financial circumstances. Of course, the second time around, a prenuptial agreement might also be a wise investment.
Source: Bloomberg, "Divorce Is Destroying Retirement", Ben Steverman, Oct. 17, 2016