The divorce rate among baby boomers has tripled in the past 20 years. This can be concerning for Texas couples who have been married for several decades and have accrued various forms of assets, including real estate, pensions and retirement plans. They may even have business assets together, resulting in a high net worth divorce. This can lead to complex property division in the event of a divorce.
A divorce late in life can cause financial difficulties for people who may have already retired and now need to find new sources of income. Cash flow is the priority for older couples going through a divorce, since it’s more expensive to support two households rather than one.
Retirement accounts are often split up in a divorce, but not without tax penalties. Early withdrawals can lead to significant taxes, making the overall value of the pension, IRA or 401(k) much less than anticipated. That’s why many couples choose to use Social Security benefits of their own or their spouse to help increase monthly income.
When couples have been married for 20, 30 or even 40 years or longer, it’s more common to experience complex asset division. The couple have spent a majority of their lives accumulating assets together and it can be challenging to have to divide this marital property in a divorce.
It can also be difficult to rebuild a life alone after people go through a divorce in their 60s or 70s. These so-called golden years can be fraught with worry about finances and living from one day to the next. We can never predict what the future may hold, so proper financial planning is key.
Source: InvestmentNews, “When love won’t keep them together” Darla Mercado, May. 11, 2014
