In a retirement planning brochure, it is not uncommon to see an elderly couple smiling at each other as they stroll along a beach. However, couples in Texas who are on the brink of divorce while being close to retirement face a much more difficult reality. A couple of tips may help with tackling the financial aspect of a late-in-life divorce.
First, a challenging first step when trying to navigate a divorce proceeding is to shift one’s financial mindset. Before contemplating divorce, a couple naturally planned to share a house and expenses during divorce. However, following divorce, thinking about retirement plans in a totally different way is necessary, as being on one’s own can cost more financially.
Second, dividing the retirement assets is necessary during divorce. Many factors affect the equitable division of retirement funds, such as how long the marriage lasted. Still, any retirement assets that were accumulated prior to marriage continue to be considered separate property.
When dealing with the splitting of retirement assets and other property during divorce, a couple in Texas may be able to see eye to eye and achieve a settlement they both like at the negotiation table. The benefit of negotiation is that both parties can feel more in control of their divorce and avoid the conflict and stress that come with traditional divorce litigation. However, if they cannot make negotiation work for them, they will have to go to trial, where a judge will step in to make these important decisions for them. Unfortunately, the outcome of trial may not necessarily be in alignment with both parties’ or one party’s wishes.
Source: forbes.com, “Does Divorce Derail Retirement?“, Larry Light, July 24, 2017