Some couples who divorce later in life can run the risk of endangering retirement for themselves. Studies show that divorces among young people are less common, but for those 50 and older, the rate has nearly doubled, and it has nearly tripled for those 65 and older. In California and other states, the property division of 401(k) accounts, IRA’s and pensions can potentially come with healthy associated costs during a gray divorce. So planning ahead and carefully proceeding through this period could prove invaluable to one’s future best interests.
Experts agree that individuals who divorce later in life have less time to rebuild themselves financially. After age 50, employment opportunities become more limited, and those who are still working may have maxed out their earning potential. With the number of years left to work reduced and an individual’s peak earning years already passed, it can be difficult to make up for the loss and recover financially.
If proper due diligence isn’t taken, dividing property and retirement accounts during a gray divorce could become comparative to saving too little, too late in life. Some seniors may not be prepared to live on half of their anticipated income, and many retirees may be fearful about not having enough money to sustain them through their golden years. For California residents, a divorce late in life can present numerous challenges, especially to their future financial stability.
Retirees could become subject to taxes and penalties if the process of property division is inadequately handled. For all the reasons above, it may be in the best interest of those who are contemplating a gray divorce to speak with an attorney who is experienced with such matters. An attorney can help to ensure all qualifiying marital property is accounted for during the division of a couple’s assets, and can help clients avoid many potential costly pitfalls and mistakes that sometimes occur during this process, allowing them to move on toward a brighter future.
