When a couple gets divorced, the initial thoughts are usually centered around who receives the tangible assets? Parties may readily consider the house, the car, bank accounts etc., but what is often forgotten is the impact divorce may have on your retirement plan. The longer the marriage, and the closer the parties are to retirement, the more the retirement plan can be disrupted.
Most people do not plan for divorce. However, statistics show that the divorce rate for couples over age 50 has doubled since 1990. If you are currently going through a divorce and are approaching retirement, there are some things you may want to review when going through the process. The first step is to understand what retirement assets you and your spouse have. It may be that your pre-divorce plan for retirement was to share the house with your spouse, splitting expenses, and relying upon one spouse’s retirement assets in order to meet expenses and medical benefits. Now, if you are on your own, the planning will be substantially different. It is important to develop a new plan that will calculate the needs you will have post retirement.
Once you review your retirement plan and analyze your future needs, you will have to consider how the division of assets will affect that plan. In New York State, pension benefits earned during a marriage are marital assets subject to equitable distribution in the event of a divorce. New York State case law has developed the calculations for determining what the distribution would be. Speaking with an attorney experienced in divorce proceedings may help you calculate the amount you may have to share with your spouse in the event of divorce.
Even after you determine how much of your retirement assets may be impacted in the event of divorce, it is important to factor in the other circumstances surrounding a divorce. For instance, if you are required to pay maintenance to your ex-spouse, this added expense can affect your ability to save as aggressively for retirement, possibly extending the time you will need to work in order to acquire enough retirement assets to meet your living expenses, in the event you do not wish to change your lifestyle to account for the lost savings.
Speaking with an attorney who is experienced in divorce matters can help analyze your plan and help you prepare best. An attorney may be able to assess your needs and goals and work to keep your retirement plan on track. Also, with divorce mediation or negotiation, many of these concerns can be worked out between the spouses. Filing for divorce is often challenging and stressful at any age, but divorcing near retirement poses additional financial concerns that require specific attention. If you are facing a divorce, it is best to contact an experienced divorce and family law attorney. The skilled attorneys at Heather A. Fig, Attorney at Law, PLLC can help you through this trying time. We are conveniently located at 982 Montauk Highway, Suite 6, Bayport, NY 11782. To schedule a consultation, call our office at 631-419-6111 or fill out our contact form.