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Divorce can alter retirement plans

by | Apr 16, 2020 | Divorce

You may have heard of the term “gray divorce.” When you are over 50 and ending your North Carolina marriage, this can have an impact on your situation. Perhaps the biggest one comes in the form of the damage that it can inflict on your retirement planning.

Divorce Can Mean Later Retirement

In many cases, divorce will postpone your retirement and force you to have to work longer. The obvious culprit is the fact that one retirement nest egg split into two will lower the amount of assets that each party has. Then, you will both need to maintain a separate household so the money goes less further. Thus, retirement planning is the issue on everyone’s mind when negotiating a divorce settlement. Divorce will raise the risk that your retirement will not be fully funded.

Divorce Can Sting in Other Ways

Divorce can be expensive and harmful to retirement in additional ways. Some marital assets must be sold. In some cases, you may not be able to get full market value. In addition, there may also be transaction costs incurred to sell the property. In addition, you may lose some federal tax breaks for married couples and end up having to pay higher tax rates. You can see how divorce can be complicated even when there are no children or custody issues involved. The issues when there are assets are just different.

Since divorce can have such a profound impact on your retirement plans, having an attorney on your side who can help you negotiate the divorce settlement agreement is helpful. You do not want to settle for less than your share in the agreement because you may never get a chance to recover from a financial hole in time for retirement. If there are joint assets, you will not want to sacrifice your entitlement to them. You may benefit from having legal counsel advise you on how to maximize your share of the marital estate.