The dissolution of a marriage in Massachusetts typically has a major impact on the retirement plans of the couple getting divorced. In fact, existing retirement plans can especially be derailed for those who get divorced close to their retirement years. A few tips may help those navigating divorce as they draw closer to their golden years.
First, one of the hardest steps to take when getting divorced is to shift one’s financial mindset. During marriage, a couple’s retirement scenario likely includes sharing a house together along with long-term care, expenses and medical insurance coverage. However, after getting a divorce, thinking about retirement in a new way is essential, as being retired as a single individual can naturally be more costly.
Another important consideration is how retirement assets will be split up during a divorce proceeding. In Massachusetts, a couple can expect their retirement assets to be divided in an equitable manner based on multiple factors, such as how long they were married. Even the retirement assets in an account under just one spouse’s name must be equitably divided between the two parties getting divorced. Any retirement funds accrued prior to marriage, however, will remain separate property, so they will not have to be split.
Divorce can inherently be challenging at any age but especially for those who do not have many working years remaining before they retire. However, if two divorcing spouses can find common ground, they may be able to work toward a settlement that is mutually beneficial and satisfactory. If they cannot reach a settlement, a judge in Massachusetts will have to decide for them how their assets will be divided instead.
Source:Â Forbes, “Does Divorce Derail Retirement?“, Larry Light Log, July 24, 2017