According to a report published by the Society of Actuaries (SOA), divorcing in retirement is both a financial and emotional burden on an individual. Despite this burden, the rate of gray divorces, or divorces for couples that are over 50 years old, is growing.
A retiree can help secure their assets by following a few simple tips:
Social Security Benefits
One option retirees can do is to rely on their Social Security benefits. Social Security pays benefits that are similar to spousal benefits. An individual is eligible for half of their spouse’s Social Security benefits if they were married to their spouse for at least 10 years. However, one should note that they lose eligibility once they remarry.
Split Assets Evenly
A woman interested in a gray divorce in retirement often faces the worst of the financial effects. This is primarily due to the way the assets are split for older couples. Many times, the man will take the retirement account while the woman takes the house, including its expenses. This choice leads to a 45 percent decrease in the woman’s standard of living.
To prevent this, a woman should talk to a lawyer to ensure that her assets are being split evenly and fairly. Especially in retirement, it is crucial that each individual has their fair share of the spousal assets. A lawyer can help their client make the best financial decisions by determining the value of each asset and the income one may receive through the proceedings.
File a Qualified Domestic Relations Order
Unless there is a pre-nuptial agreement in place, an individual is entitled to their spouse’s employer-sponsored retirement or pension plan. In order to ensure that a spouse receives their fair share of the spousal assets in a retirement account, they should look into filing a Qualified Domestic Relations Order (QDRO).
A QDRO is a judicial order for an individual’s retirement plan to pay out child support, alimony, or marital property rights to their spouse or dependent. It protects an individual by allowing a portion of their spouse’s retirement account to be deposited into their non-employee retirement account. Couples should note that any money that was in the retirement account before the marriage is usually separated from spousal assets.
Spouses may begin receiving their payments in a lump-sum payment or in periodic payments, depending on the retirement plan. A spouse who is trying to secure a significant amount of money from their ex-spouse’s retirement account should contact a lawyer to help draft the QDRO.
Moorestown Divorce Lawyers at Stockton Family Law Help Retired Individuals Throughout the Entire Divorce Process
If you are retired but considering a divorce, you need to contact one of our accomplished Moorestown divorce lawyers at Stockton Family Law. Our lawyers understand both the financial and emotional burden of divorce in retirement, and we work hard to help alleviate these burdens. For an initial consultation, contact us online or call us at 856-412-5052 today. Located in Moorestown, New Jersey, we proudly serve clients throughout South Jersey, including Mount Laurel, Burlington County, and Camden County.