According to data from the National Center for Family & Marriage Research, while the overall divorce rate has slightly decreased in the last 20 years, it has actually doubled for Americans who are 50 years of age and older.
The report found that approximately 300,000 couples that were over 50 were divorced in 2008. Researchers say that if the rate remains consistent, more than 400,000 baby boomer couples will have ended their marriages in the next twenty years.
The stakes are higher when couples over 50 begin divorce proceedings. For example, many Georgia residents over the age of 50 own property, have long work histories and own life insurance, which can all be taken away from them in an unfair settlement.
To help protect their rights during the complicated process, there are four financial mistakes that couples over 50 should consider:
Don’t ignore taxes on retirement funds. Pre-tax retirement accounts are one of the largest assets that will be negotiated during a divorce. Financial advisors encourage individuals to research the true value of the accounts, as it can be considerably less than the statement’s balance. The money is taxed when it is removed from the retirement fund, so the true value of the account can be 35 percent less than what the statement says.
Protect your alimony payments. Alimony may be awarded to a spouse who did not work during the marriage or who earned significantly less than their partner. However, it is recommended that an individual does not rely on the monthly alimony payments, since the likelihood of the spouse’s death increases as he or she ages. Taking out a life insurance policy on a former spouse will help ensure that you remain financially stable even after his or her death.
Read more in the next post to learn about how you can protect your Social Security benefits and your children’s inheritances.
Source: The Wall Street Journal, “Divorce Over 50: 3 Mistakes to Avoid,” Catey Hill, 23 March