Understanding the impact divorce could have on retirement plans | Lane & Lane, LLC
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Understanding the impact divorce could have on retirement plans

Many individuals in New Jersey and elsewhere consider it essential to plan for certain stages of life. However, while forming a strategy for retirement might mean preparing for certain possible life changes, the end of a marriage might not be a scenario that is given much thought. While this can be an emotional process regardless of age, those who are closing in on retirement may wonder how a divorce will affect them, and how they can safeguard their financial futures.

Although a divorce might not necessarily derail a person's retirement plans entirely, the division of assets will likely have an effect on his or her life. However, there may be certain programs that can help soften the impact, and individuals who have reached a certain age may be able to adjust work-related contributions to their retirement accounts. In some cases, one may have to put off retirement for a year or two, and while this might not be preferable, it could be the best route to take.

Following divorce, a person may even be tempted to dip into retirement savings for a variety of reasons. However, a similar decision may only provide short-term relief, and the consequences of taking an early withdrawal could be devastating. Individuals who divorce late in life may also find it beneficial to seek guidance before they begin drawing Social Security, as factors such as length of marriage and income of both spouses could have an impact on the amount of benefits they are eligible to receive.

With a multitude of factors to consider during a potentially emotional period, individuals who are facing divorce late in life may find it beneficial to seek guidance early on. By consulting with a family law attorney, a person in New Jersey could gain a better understanding of what to expect throughout the process. An attorney can address any concerns a client may have about life after divorce and provide assistance in pursuing the best outcome possible during subsequent legal proceedings.

Source: westborough.wickedlocal.com, "7 ways to save for retirement if you divorce later in life", Alan F. Auteri, March 13, 2018

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