North Tampa Legal Group, PA

Preparing for retirement during divorce

On behalf of North Tampa Legal Group posted in divorce on Wednesday, November 9, 2016.

Divorce rates may be down overall for couples in Florida and throughout the country, but people over 50 are more likely to divorce than in previous generations. This means that many people may be divorcing as they approach retirement age, and this could have serious financial repercussions for people as they age. However, there are several things people can do to protect themselves financially.

It is important for people to understand their financial situation, and it may be necessary to look for odd jobs to supplement income. More than 40 percent of women and around 23 percent of men experience a decrease in income after a divorce. Some couples may find there are financial benefits to putting off ending a marriage. After 10 years or more of marriage, one spouse may qualify to draw Social Security on the other spouse’s earnings. Furthermore, at age 65, a person becomes eligible for Medicare, and this may be more cost-effective than many insurance plans.

Retirement accounts are usually split between a couple, and it is important to look into ways to minimize the tax burden of doing so. People should also make sure that they update their beneficiary designations on retirement accounts, life insurance policies and any other assets they have that are passed on in such a manner rather than by a will.

Divorce does not always mean having to go before a judge who makes decisions on property division and other applicable issues. Couples have the option to negotiate with one another with the assistance of their respective attorneys. They can then make a legally binding agreement, and they might be happier with the outcome since this approach them gives them more flexibility to craft a plan that works best for their situation.