Mistakes to Avoid When Divorcing After Age 50
Deciding to divorce at any age is always a hard choice to make and a difficult experience, but getting divorced over the age of 50 can be especially complicated and can be filled with pitfalls and rules that younger couples may never have to consider. According to a SmartMoney.com news report, the overall divorce rate has decreased slightly over the past two decades, but data from the National Center for Family & Marriage Research at Bowling Green State University reveals that the rate for couples over 50 has doubled.
As the stakes are likely to be higher for divorcing couples over 50 for several reasons, such as a pair having more assets like real estate, obtaining a favorable settlement is particularly important. As such, here are some common mistakes for the over-50 set, which may lead to a lower settlement or you having to pay your ex more than you should.
- Ignoring taxes on retirement funds: For those over 50, pre-tax retirement accounts may be the most significant asset they have besides the family home, and understanding the true value of the account is essential. As the money is taxed upon withdrawal, the real value of the account may only be 65 percent of what the statement says, so consider negotiating a larger portion of other shared savings to make the trade more equitable.
- Undervaluing Social Security: Social Security is often undervalued in divorce negotiations, so a person who makes less than his or her spouse will want to claim the higher earning spouses’ Social Security, as it will be worth more. If your spouse has to claim your benefits, make sure to figure that amount into negotiations for things such as alimony.
- Overvaluing alimony: Alimony is one of the most common ways for a divorce settlement to compensate for discrepancies in a couple’s income, but counting on these payments after age 50 may be risky due to the risk of death increasing. In order to protect yourself, consider getting a life insurance policy on your ex.
Obtaining a favorable divorce settlement, especially later in life, is extremely important, which is why it is essential to have the professional assistance needed to do just that. Divorce financial and tax issues lawyer Sheryl R. Rentz understands the complicated issues that arise during a divorce and will work diligently to ensure your best interests are protected. To see how Ms. Rentz can help you sort out your finances and resolve other divorce-related issues, call (610) 645-0100.