On behalf of North Tampa Legal Group posted in divorce on Tuesday, March 15, 2016.
Florida residents who are at or older than 50 and who are facing the end of their marriages might wonder how they can protect their retirement during a divorce. Though becoming newly single can have an effect on financial stability, there are steps people can take to make sure that their retirement plans continue on course.
One of the things divorcing couples can consider is selling the family home. Though it is comforting to stay there after the upheaval of the divorce process, selling the home will help to reduce monthly expenses and thus increase retirement income if the money made from the home sale is invested in a diversified portfolio.
Being smart about the division of assets is also key in ensuring the protection of retirement plans. A financial planner can help with this process, since the value of each asset must be calculated before negotiations can be made. Assigning a value to each asset also includes how taxes will affect its long-term value. It is also important to file a qualified domestic relations order. As well, beneficiary designations need to be revisited on such items as life insurance policies, 401(k) plans and individual retirement accounts.
Even though a divorce often results in a significant reduction of income for both parties, it does not necessarily need to result in retirement plans gone awry. Planning carefully, negotiating smartly and adapting expenses to a new financial reality are all steps that can be taken to ensure that retirement continues as planned. An attorney can often be of assistance to a divorcing client in this regard by structuring the terms of a property division settlement agreement.