Timing is everything

Sometimes, with a divorce, the timing may be unexpected. You may have been married 20 or 30 years, raised your children and be looking forward to your retirement when suddenly your spouse decides “it’s over.”

Now, divorce is likely to be upsetting and an emotional rollercoaster at any age, but if you are 50 or older, it can cause additional problems with your retirement. All of that planning will now have to be redone and reset.

Property division in a divorce is always complex. There are the two, often very divergent views, of what is equitable in terms of dividing the marital property, which is the standard that a judge will apply in Missouri when the parties cannot agree to terms of a property settlement.

For older couples, divorce is different. Without any children, there is no issue of child custody or child support, which can lead to very different concerns. lHow much income you will have by the time you wish to retire can become the most important element of property division.

Retirement accounts, Social Security and pensions need to be carefully analyzed and amortized, to ensure real equity will be achieved when the assets are distributed.

While a large 401(k) may appear valuable on its face, because it is taxable as ordinary income when it is distributed, its actual value may be far less than a similarly sized investment account that is paying a distribution that is taxed at the lesser capital gains rate.

You may also need a qualified domestic relations order (QDRO) for certain pension or retirement accounts.

While a divorce may be a necessary for a marriage that has run its course, it is imperative that you carefully examine all of your finances, to ensure that you have not unnecessarily damaged your financial future.

Source:, “ Divorce Derail Your Retirement,” Carla Fried, March 3, 2016

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