The baby boomer generation has been divorcing at alarming rates for the past decade or so. In fact, divorce rates over the age of 50 have doubled in the past 20 years. Middle-aged divorce, especially divorce after 50, can have an incredibly detrimental impact on retirement.
Women are disproportionately affected by later divorce in terms of retirement. According to Bloomberg, 27 percent of women divorced after age 50 live in poverty. Overall, late-in-life divorce can lower your income and force you to work longer than you may have expected.
Many women splitting up later in life want to maintain control of their marital house. This inevitably means they are sacrificing in a different financial area. Laying claim to real estate may not be the wisest financial decision. Money tied up in a house lacks liquidity, which is something to think about if you are planning to retire soon, or may already have retired.
In community property states like Washington, retirement assets are normally divided equally. This includes savings and pensions. When dividing up assets is it very important to assess the tax implications of different types of retirement savings. For instance, a million dollars in a 401k account does not have the same real value as a million dollars in a Roth IRA.
Late in life divorce does not have to be financially devastating if certain safeguards are implemented to protect your retirement.
If you have questions or concerns regarding your divorce in the Greater Seattle Area, we suggest hiring an experienced family law attorney. Please contact Elise Buie Family Law Group, PLLC for a phone consultation.
