Getting a divorce close to retirement is often significantly different from getting one when you have your whole career ahead of you. You will probably have to deal with some unique situations, so please do not use this article as legal advice. You should involve an attorney and probably also an accountant or financial planner, when making these decisions.
That said, there is some good news: Divorcing near retirement often means less complexity surrounding your children. However, there is typically more to work out when it comes to your finances.
At this stage, you probably have more assets, possibly in the form of real estate or retirement accounts, and fewer responsibilities for your children, who may be adults with families of their own. Here are some of the first questions you should ask yourself.
How Will You Maintain Insurance Coverage?
You should always think about health coverage during a divorce process, but even more so when approaching retirement. For example, COBRA has the potential to provide some continuity, but it is also usually expensive. It is important you get fair treatment in this area; however, it is not always immediately clear what that entails. Be especially mindful of the impact health insurance might have on your retirement plans, especially:
- If you are currently not eligible for government coverage
- If your spouse was covering you under an employer plan
- If your post-divorce income would make it difficult for you to pay your insurance premiums
Who Gets the House?
The family home — and all the equity, liens, mortgage debt or lines of credit associated with it — is often a major point of discussions during divorce negotiations. However, the issues tend to be different approaching retirement.
For example, at this point in your life, neither of you may want to keep your primary residence. Whether you want to retire to your home or downsize to something else, I can help you get your fair share from this important asset. The same is true of other real property you’ve invested in over the years.
How Will Divorce Affect Your Retirement Income?
Divorce will probably impact your retirement plans in some way. Making sure you get your fair share of marital property should minimize surprises, but you will probably lose some of the value you had from the loss of your economy of scale. Luckily, there is usually a way to structure agreements to minimize unnecessary penalties against your retirement assets.
Your divorce will come with some changes, but, with some work, you should be able to keep the future fair for both you and your spouse. Please call me at (312) 621-5234 to get started today.
