Waiting to get divorced until the children have grown up is a common move for couples in Billings, Montana, and other areas who know their marriage will not last forever. However, getting divorced after the age of 50 can have a major impact on the upcoming retirement years. Getting a divorce at an older age versus in early adulthood means there is not as much time left to rebuild assets before the golden years arrive.
In many cases where divorce happens later in life, one or both parties have to retire later than initially planned. Divorce can be especially challenging if a high earner is much older than the other spouse and is therefore ready for retirement but needs income to cover alimony for the other spouse. Financial security may also be difficult to achieve during retirement following divorce due to the hefty costs associated with long-term care. Getting divorced means losing a spouse who could have served as a caregiver and thus could have helped keep care costs down.
One method of protecting retirement security involves studying tax implications during the negotiating of asset settlements. Getting a retirement plan valued at $50,000 is not equivalent to getting a $500,000 home. After all, a home can be costly to keep up over the years.
When splitting assets, calculating the value of every asset after taxes is necessary to avoid shouldering too much of the associated tax burden. In addition, it can be helpful to consider how taxes will impact the income received through alimony payments, as alimony is considered taxable income. A divorce attorney can provide guidance and advice for making wise decisions regarding the division of assets during this type of family law proceeding in Billings, Montana.
Source: wtop.com, "Over 65? How to know if you can afford a 'gray divorce'", Dawn Doebler, Feb. 21, 2017