Elise Buie Family Law | Retirement Planning After Divorce

Elise Buie Family Law  |  Retirement Planning After Divorce

It might seem like common sense that when a marriage dissolves, all the assets owned by the couple must be dispensed with according to the laws of the state in which the couple lived. But what about planning for the years following divorce? Day-to-day living expenses are not the only concern for divorcing couples; saving for retirement is an enormous consideration, as well.

Often times couples will have planned for their retirement as a unit, and taken into account the income of both parties when saving and structing an investment portfolio. However, divorce can throw a wrench into this plan.

When people are married, expenses are shared, making it easier financially to save money for retirement years. But, when a once united couple splits, each person has to look out for their own financial future. The costs associated with maintaining two separate households are likely to hinder the ability of one or both parties to set money aside for the future, unless they the steps necessary to plan for those tomorrows.

Sure, upon divorce, retirement accounts are to be split according to state law, unless the parties agree otherwise. But the reality that one pension is being split into half means there might not be enough to go around. That means careful and deliberate planning is necessary to ensure a financially secure retirement, post-divorce.

Financial experts advise individuals to save and invest money over time so they can live on an annual income of at least 70 percent of what they were earning during their professional career. When divorcing, it’s advisable for each party to retain their own qualified financial expert to ensure each person receives an equitable share of assets while helping their client forge a viable financial plan for their retirement years. 

A qualified, experienced financial expert can advise people about:

• Investments

• Taxes

• Estate planning

• Retirement planning

• Post-divorce budgets

It’s also wise to wait until as close to age 70 as possible before you begin to tap into your Social Security benefits. The Social Security Administration’s Delayed Retirement Benefits page (www.ssa.gov/retire2/delayret.htm) is an excellent resource for determining when the time is right to start drawing Social Security checks. It’s also important to note that retirees married 10 years or longer who did not remarry may be entitled to Social Security benefits on their former spouse’s record, if certain requirements are met.

It’s imperative to plan for one’s retirement years, regardless of whether a person is married or divorced. However, since divorce spells the end of a two-income family, or at least the end of a unified household sharing expenses, planning for one’s retirement years is all the more crucial. The personal and financial disruptions caused by divorce make it easy for newly single individuals to neglect their retirement planning. To ensure your future,  seek appropriate advice and take all necessary steps to keep your retirement planning on track.

STAY UP TO DATE

Subscribe to our newsletters

 
Subscribe to one or more of our newsletters, delivering meaningful insight on topics that matter to you and your family.
ebl home subscribe image

FURTHER READING

Latest Blog Posts

If you and your partner reside in Washington state and are unmarried, you each might qualify for the legal protections availed to you by law by classifying your relationship as a committed intimate relationship.

One of the greatest gifts you can give your family is to build an estate plan while you are alive and well. Estate planning allows you to formally communicate your wishes so they will not be up for interpretation by…

A co-executor can help facilitate the distribution of assets, minimize conflicts, and provide much-needed support to grieving families.

The law makes it easy for people to get out of bad marriages. Washington, like most states, acknowledges no-fault divorce. This means that if you want a court to dissolve your marriage, all you have to do is file for…

Washington state’s laws on non-marital relationships, including committed intimate relationships (CIRs), can be convoluted, especially in the absence of a cohabitation agreement. Given the ambiguity that exists for unmarried partners in Washington state, thinking about the future and what it could look like is more important than ever. This is especially true in terms of aging, incapacity, and death. Fortunately, you can address each of these issues in a comprehensive estate plan.

Prenups and postnups can strengthen a marriage, given how they require relationship partners to put their cards on the table for each other to see, offering transparency and peace of mind. Despite their similarities, there are a few significant differences between the two.

Child support is one of the most contentious issues in divorce cases where parties have minor children. Even though Washington state law uses the same complex mathematical formula to determine the amount of child support for each child, there is…

Family law and estate planning often intersect. This is particularly true when contemplating divorce, remarriage, or blending families.

At some point during your divorce case, friends and family members whose own marriages ended in divorce probably told you that it gets better, and it does. Of course, from your perspective, getting out of a bad marriage might be…

Co-parenting over a long distance when you are a non-residential parent does not have to equate to sacrificing involvement in your children’s lives. But it likely does mean you will have to make tweaks in your communication and parenting style to accommodate the new living arrangement.