Ending a marriage late in life often means that there are fewer years to rebound until one retires. New Jersey residents over the age of 50 who are contemplating divorce need to make sure that they deal with the issue of retirement carefully. In most cases, they need do what they can to preserve and build upon the retirement resources received from the marital estate.
A realistic view of the budgetary requirement needed in order to sustain separate households is essential. Prior to filing for divorce -- or at least before making any agreements regarding the division of property -- gaining an understanding of the marital finances versus single finances is a good place to start. Many expenses will increase for each party while the income available to each party will more than likely be reduced.
Timing should also be examined. For example, for many New Jersey residents, it would not be beneficial to end the marriage shortly before reaching the 10-year mark. Once a couple has been married for 10 years, the receipt of Social Security benefits based on the other spouse's work record might be possible. Age-related deadlines might also need to be considered. If one party receives a portion of the other's retirement account, the tax ramifications regarding early withdrawals, along with other considerations, need to be taken into consideration.
Even though many people will need to work to rebuild retirement after a divorce, it does not have to mean decades more of work. Before entering into property division negotiations, one needs to understand the full financial picture both before and after the divorce. This will undoubtedly affect one's strategy regarding what is asked for and how it will be transferred.
Source: mysanantonio.com, "Don't Let Divorce Sabotage Your Retirement Plans", Arielle O'Shea, Nov. 7, 2016