Divorce rates are going up quickly for baby boomers, having doubled between 1990 and 2014 for adults over 50 and tripled for adults over 65. Although baby boomers who are going through divorces do not generally have to worry about child custody issues, they have to deal with other issues that are not a problem for younger couples. One of these involves figuring out how to divide up retirement accounts.
Protecting Retirement Accounts In Divorce
In fact, for divorcing couples in this age range, retirement accounts and pensions are one of the biggest matters of contention, with only alimony being bigger, according to an article from CNBC. This is largely because people of this age have a lot less earning capacity left when compared to younger couples, and they need these accounts in order to be able to get by financially.
There are a few things that should be kept in mind for a couple in this type of situation. Retirement benefits that have been obtained during the marriage, have been added to during the marriage or have increased in value during the marriage are subject to property division. You should also consider the tax, if any, that you have to pay on these accounts. The retirement accounts will be divided on their value after taxes rather than before. You should also avoid trading these accounts for other assets, such as real estate. It is possible that the asset (if it is something like a house) will end up costing you money rather than helping you in any way, and also the spouse who is more dependent could underestimate the value of the 401(k).
Essentially, it is important that you realize how potentially valuable the retirement account can be and not give it up. If you are in your 50s, 60s or older, you want to make sure that you have your nest egg, so that you do not have to worry about being strapped for funds in the coming years.
You Do Not Have To Figure This Out On Your Own
Though this may be a frustrating situation, you do not have to take care of these matters on your own. An experienced lawyer can give you advice on the dos and don'ts of your retirement accounts and other issues in divorce. Attorney Terry L. Hart has more than 30 years of experience and is committed to helping you find a just way to split the assets and make the divorce as fair as possible so that you can be financially comfortable as you head into your golden years.