Detroit residents spend years, if not decades, trying to engage in financial planning for themselves and their families. Retirement plans, investment and savings accounts and other means are used to manage one’s wealth over the years.
Of course, even the best laid plans can go awry. Changes occur over the years that can have a dramatic impact on one’s financial plans, whether those changes involve uncontrollable financial matters like market conditions, or those things having to do with an individual’s personal life, such as a divorce.
In recent years, the number of divorces for individuals in their 50s and 60s has gone up dramatically. Baby boomers often face different divorce legal issues than those individuals who get divorced in their 20s or 30s.
For instance, while a baby boomer divorce may be more likely to be a high asset divorce because of the years the couple has spent accumulating assets, a baby boomer divorce can also involve more financial strain. This is because those who divorce earlier in life typically have more time to recoup the financial losses they would suffer in a divorce compared with those who may be at or near the age of retirement.
This poses some unique challenges for baby boomers. For instance, the couple’s 401(k) plans, pensions and retirement plans may become a greater point of emphasis in the divorce, as these assets may be significantly larger than individuals who divorce in their 30s. Thus, valuation issues involving these assets will be addressed to ensure an equitable division is made.
Spousal support may also be a bigger issue, particularly if one spouse has been financially dependent on the other for a number of years. It will be more difficult for these people to begin earning an income later in life when compared with those who divorce in their 20s or 30s. Accordingly, these and other issues should receive careful attention to ensure baby boomers are financially protected.
Source: Forbes, “Easing the financial impact of divorce in retirement,” Juliette Fairley, Jan. 22, 2016
