The idea of growing old and gray together may seem idyllic, but it is not always a reality. Like many other couples in New Jersey, you may have reached a point in your marriage where you are no longer happy and have not been for some time. However, what should you do if you are nearing retirement?
Divorce does come with a financial impact, but that should not discourage those who need to end their marriages from seeking one. With careful planning, attention to detail and an eye on the final goal, most people can come out of the other side of divorce with a solid financial foundation.
What should I watch out for?
Building wealth takes time, and for those who have been at it for years, dividing everything up during a divorce can be difficult. Wealth meant to support two people within one household typically does not go as far once split. This can put your retirement security at risk, especially if you are approaching retirement.
Retirement security is a growing concern for many people, and understandably so. Experts concluded that 53 percent of U.S. households that have divorced are at risk for financial instability in retirement. Does this doom every divorced person to a financially rocky retirement? Not necessarily.
Improve your post-divorce finances
You have several options for crafting the best possible financial outcome. If you and your ex want to reduce the overall cost of your divorce, using an alternative dispute resolution to negotiate a settlement out of court can save you both time and money. You will still need a judge to sign off on your settlement.
Utilizing all pathways to secure a future income is also a good idea. Here are a few options to consider:
- Applying for Social Security benefits based off your ex-spouse’s work record
- Using a Qualified Domestic Relations Order to avoid penalties and taxes on early retirement savings withdrawals
- Adjusting your financial habits to better reflect your current situation
Don’t leave your finances up to chance
Whether you have been married for two years or 20, you do not have to sacrifice your happiness now to ensure financial stability in the future. However, to avoid becoming just another statistic of those who are not prepared to face the financial struggles of retirement, you should approach divorce as prepared as you can possibly be. This usually includes collecting important financial information — such as banking information, asset valuations and more — as soon as possible.
Putting this information into action can be difficult within the confines of New Jersey family law, which is often complicated and nuanced. An experienced attorney can usually explain your options and help you determine the best possible way to proceed with your divorce.