For couples in Massachusetts who are at or nearing retirement age, the decision to divorce has different repercussions than those facing younger spouses. After the age of 50, retirement becomes a dominant factor in any significant financial decision, and divorce is no exception. Older spouses must make carefully considered property division choices when negotiating their divorce.
One issue that many older couples face involves how to handle the family home. In many cases, a divorcing couple lives within the same home that they raised their family in. The home may hold a great deal of emotional value for both spouses, but in a faltering real estate market, can also pose a number of financial difficulties. While each scenario is unique, in many cases the best course of action is to sell the home and divide the proceeds, leaving both spouses free to make housing choices that suit their retirement goals.
Another issue involves the financial choices that are made in the time frame after the divorce is made final. Individuals have the option of withdrawing a certain amount from their retirement savings without incurring the tax penalty. This is a one-time opportunity and can provide some with the ability to cover certain divorce expenses, but it also poses the risk of depleting retirement funds that will be needed in the near future.
These represent just some of the many property division choices that face older spouses who are preparing to divorce. It is important for Massachusetts residents to realize that the decisions made at this stage of their lives can influence their financial horizon for the foreseeable future. Every effort should be made to emerge from a late life divorce in the best financial shape possible, and to build a strong financial foundation for the years to come.
Source: Huffington Post, 4 Divorce Mistakes That Can Derail Retirement, Marilyn Timbers, Aug. 27, 2013