Divorce among older spouses is becoming increasingly common in California and other states. Also known as “gray divorce,” a late-in-life separation can threaten a senior’s hard-earned retirement savings. However, there are several ways to prevent a gray divorce from affecting retirement.
Going through a divorce can be quite difficult emotionally. It is important to make important financial decisions with a rational mindset rather than letting the emotional aspects of the situation take control. Many people want to maintain the same social status or appearance in front of their friends that they enjoyed before the divorce. It is important to not let this get in the way of being practical about budgeting decisions.
Getting paperwork in order is an essential part of financial planning during divorce. Some of the essential documents include tax returns for the last several years, pay stubs, credit reports and retirement account statements. It is a good idea to keep these in a safe place that is easy to access.
Consulting a financial planner who specializes in retirement accounts may help a soon-to-be ex get a clear picture of what their life will look like after the divorce and what their goals for the next year should be. It is important to think ahead to the next 10 or 20 years.
A divorce lawyer could help a client navigate the process. The way that an initial settlement agreement is drafted can make a major impact financially for the next several years.
An attorney may also be able to ensure a fair property division process. For example, if the spouses are business owners one spouse may want to keep the business while the other wants to walk away. An attorney could help make the process less stressful, especially in cases where complex asset division is an issue.