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Dividing retirement assets in a ‘gray divorce’
Dividing retirement assets in a ‘gray divorce’

Dividing retirement assets in a ‘gray divorce’

On Behalf of | Oct 23, 2018 | Divorce, Firm News |

Saving for the transition to retirement can always be a challenging project, but it can be especially concerning when going through a divorce later in life. More Floridians than ever are choosing to divorce at older ages. In the past two decades, the divorce rate for spouses age 50 and up has doubled. While dividing finances after a divorce can be complicated for a couple of any age, this is especially true for people who divorce close to retirement age.

Retirement accounts are often some of the largest assets held by a married couple. When the couple has only been married for a short time, there may not be much division of these accounts necessary as part of a divorce settlement. However, when a couple divorces after decades of marriage, their retirement funds will require a complicated and thorough separation. Once a divorce settlement is reached, the challenges are far from over. Both parties have relatively few working years left to rebuild their retirement assets after the division, and it can be far more costly to finance two separate retirements than one joint retirement.

Tax issues are another thing to keep in mind when dividing marital assets. Not all accounts receive the same type of tax treatment, after all. For example, a Roth IRA contains post-tax funds while a traditional IRA or a 401(k) will later be taxed upon distributions. The cost of taxes to come should be considered in order to make a fair division.

When people consider divorce at any age, there are an array of financial and practical concerns to address. A family law attorney can work with a divorcing spouse in order to reach a fair agreement on a number of issues, including property division and spousal support.


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