On behalf of Cooper, Tanis & Armas, P.C. posted in divorce on Friday, March 11, 2016.
When older Colorado residents are planning to divorce, they need to make certain they pay extra attention to their ability to retire. A divorce can cause a lot of problems with retirement plans if people don’t address the issue in their settlement negotiations.
One thing people should consider is selling their marital home. Doing that while divorcing means that both can share in the costs of the sale. This can also help by saving monthly housing costs, allowing people to put that money into savings for retirement. They can also use their sales proceeds for making catch-up retirement plan contributions, which are allowed for people age 50 and older.
People should also view assets in terms of the income they should produce. They should also think about taxes that may be assessed on them as well. Estranged spouses should also take into consideration the Social Security payments each will receive. A lower-earning spouse can draw half of the higher-earning spouse’s Social Security benefit after reaching age 62 if that amount is higher than what would otherwise be received.
Thinking about retirement is especially important for those who are older when they divorce. The end of a marriage can have negative financial consequences for younger people, too. When people are older, though, they have fewer years remaining to save for retirement. They may want to get the help of a divorce attorney to try to figure out the best way they might divide their assets to help protect their ability to retire on time. An attorney may be able to determine the tax consequences of different proposed divisions of assets and take this and other matters into account when negotiating a settlement agreement.