New Jersey residents who divorce later in life have different concerns than younger people as they head toward retirement. Not only are their goals and outlook more focused on consolidating assets, but their plans don’t usually involve a career change or starting a new family.
When two people have been together for some time, their combined assets become quite a nest egg that can become precariously small once the division of marital property is done. As retirement planning often involves complex asset allocation, it can be challenging for spouses to untangle financial holdings successfully.
For residents of Hackensack and surrounding communities, it can be beneficial to get tips on the legal aspects of divorce as they navigate the road ahead.
Anticipating the outcome of a gray divorce
Census Bureau data on gray divorce reveal that nearly 40% of couples aged 65 to 74 go through a divorce, and the divorce rate in couples 50 and older is continually rising. With so much of their financial future at stake, it is crucial to discover ways to mitigate the damage of the split and be able to recover enough assets to afford retirement comfortably.
The choice of divorce can make a massive difference in the expense, as couples who agree with decisions surrounding property division will have fewer court costs or legal fees to pay. In New Jersey, there are both no-fault and fault-based grounds for dissolution. It will be uncontested if the couple can agree on the terms, but if there are points of disagreement, it will go through the court system as a costly and prolonged contested divorce. Mediated settlements are often the least expensive.
Covering all the bases
Some of the most critical areas that the divorce will affect include:
- Financial accounts: Because IRAs are often divisible as marital property, it can help to have your own. For 401(k)s, the spouse not on the account may be eligible for a portion of it.
- Real estate: Assessing the value of each property minus mortgages or loans will help determine a fair split.
- Social Security benefits: If your ex-spouse has Social Security, you may be eligible for some benefits if you are 62 or older and were married at least ten years.
- Investments: When dividing annuities, there are several options, such as withdrawing funds, transferring to each party’s IRA, ownership transfer, or starting a new contract with the divided funds.
- Long-term care: Consider income sources such as pension and Social Security, long-term care insurance or life insurance with an accelerated death benefit.
- Retirement income: Budgeting is key to surviving retirement after divorce. Don’t overspend and consider other income streams than just Social Security.