As you age, more and more attention should be paid to financial issues. Less time to correct errors and to ascend the career ladder means that your attention should be on your bottom line at all times. After all, who wants to be a burden to someone else? If you are entering your later years and proudly refer to yourself as a "baby boomer", your retirement age is fast approaching. If you are also about to be divorced, there are several important financial issues that require your attention, so read on to learn more.
Have You Assured Social Security?
You may just assume that everyone your age can count on Social Security retirement income. Unfortunately, you may need to take a big step if you want to claim a bigger piece of the pie. Do yourself a favor and speak to a Social Security Administration (SSA) representative (or log on to the SSA website) and view your estimated retirement benefit amount. It pays to know what to expect but it may pay even more if you are able to "draw" from your soon-to-be ex-spouse's account. If you have been married for 10 years or more, your SSA retirement benefit is paid based on the higher of either your earnings or half of your ex-spouse's earnings. It might be worth taking a look at the numbers and using a legal separation agreement instead of divorcing right now.
Retirement Planning Using Divorce
Few divorcing couples view divorce as a way to plan their retirement, but it could be. If your spouse has been paying into a 401(k), that money is considered marital property and you are entitled to it. Retirement funds are not the sole possession of the person named on the account or who earned the money. To avoid paying penalties, ask your divorce attorney about Qualified Domestic Relations Orders (QDRO).
Earning More Income
With divorce comes an inevitable decrease in income for many, and it could not come at a worse time. You may be able to use certain "catch up" strategies to put more money away but many find themselves having to work past the time they envisioned retiring. Others still relish work and even find new careers to explore. Either way, your earnings may or may not affect your SSA retirement benefit, depending on how much you earn and when.
Getting divorced during your later years hold many unique challenges, so speak to some local divorce lawyers for guidance.Share