Retirement plans can change with a late-in-life divorce

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Retirement plans can change with a late-in-life divorce

On Behalf of | Feb 28, 2019 | family law & divorce

While the number of couples between the ages of 25 and 39 here in Illinois and elsewhere ending their marriages appears to be dropping, the number of people ages 50 and up doing the same thing has risen. Older couples may not have to worry about issues such as child support and custody, but they often wonder how the divorce affects their retirement plans. After spending years, if not decades, making plans for their golden years, this time in their lives can leave them uncertain about the future.

Since older Illinois residents tend to have fewer working years ahead than behind, the amount of time they have to accumulate more wealth and assets is shorter. On the other hand, these individuals can often look forward to receiving more assets in a divorce than their younger counterparts receive. This may provide a greater sense of security, but it also creates a greater urgency to make sure that they receive as much as possible in order to try to build a secure financial future.

This is often felt more keenly when it comes to retirement assets. Dividing retirement accounts at this stage in life often means losing half of the nest egg they counted on prior to the divorce. Adding to this is the fact that the same assets that once supported one household must now support two. Finding a way to make it work often requires a shift in standard of living and making adjustments to earlier plans.

One of the challenges during the divorce of an older couple is figuring out what is needed in order to live well after the proceedings end. Understanding the current financial situation versus the future one takes a thorough review. Once a clear picture is determined, careful planning could help ensure that financial security will not be just a dream, but a reality.

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