How Will Divorce Over Age 50 Affect My Retirement?

 Posted on September 11, 2020 in Divorce

For couples divorcing after age 50, perhaps the most pressing concern is the impact the divorce will have on retirement. When you have spent most of your life planning and budgeting for retirement as a married couple, it may be overwhelming to consider how your plans will change now that you will be on your own. It is inevitable that divorce will have some impact on your retirement, but with some careful consideration and the assistance of an attorney, it is often possible to salvage many of your retirement goals.

Preparing for Retirement During Your Illinois Divorce

Making sure that you are still able to comfortably retire after your divorce often requires smart decision-making during the divorce process as well as a clear plan for after the divorce is finalized. Important strategies to consider include:

• Preventing losses during the division of assets: In Illinois, contributions to either spouse’s retirement account during the marriage are usually considered marital property and will need to be divided equitably between partners during a divorce. Depending on the types of retirement accounts you have, you may need assistance from an attorney to help you avoid paying excessive taxes or incurring early withdrawal penalties when dividing your account. If you have relied on your spouse for retirement funds during your marriage, an attorney can help you ensure a fair division of assets that provides for your needs.

• Delaying retirement: After dividing assets in your divorce, you may need to consider delaying your retirement date by a few years so that you can rebuild your savings accounts up to a level that allows you to maintain the standard of living for which you had planned before the divorce.

• Returning to work: If you are already retired before your divorce, or if you have long been a stay-at-home spouse, you may need to consider returning to work for a few years, at least part-time, so that you have additional funds to contribute to retirement savings accounts.

• Increasing your monthly contributions: You may be able to avoid delaying your retirement date by increasing your monthly contributions to your retirement accounts during the years leading up to retirement. Some kinds of retirement accounts make this possible by allowing for greater annual contributions after the age of 50.

• Adjusting your retirement budget: As an alternative to delaying retirement, you may consider whether it is possible to reduce your retirement budget so that you can live on your current savings. This may mean moving to a more affordable home or planning for fewer trips than you had originally intended.

Contact a DuPage County Divorce Attorney

The thought of divorcing when you are over the age of 50 can be intimidating. At Goostree Law Group, we have a thorough understanding of the issues affecting couples who divorce over 50, and we are committed to helping you move forward personally and financially. Contact a Wheaton divorce lawyer today at 630-634-5050 to schedule a free consultation so we can help you start acting to protect your retirement savings.

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm

https://www.thebalance.com/how-retirement-plan-assets-are-divided-in-a-divorce-1289260