The dissolution of a marriage can create financial challenges at any age. For Florida seniors, however, a high net worth divorce can mean the risk of losing a comfortable retirement. Fortunately, financial experts have offered a few tips to keep those golden years golden, even if one's marriage has been tarnished beyond repair.
The first tip is that people over 50 should not automatically choose the house over other valuable assets when things are being divvied up. This is because a house doesn't offer the same kind of liquidity as other assets when it comes to funding one's retirement. In addition, unlike other kinds of assets such as an IRA or 401(k), a home will likely require further money being put into it, if it is to keep its value high.
Secondly, be sure to understand and plan for tax burdens on retirement funds. Money taken from a 401(k) or 403(b) during retirement will be taxed. This is something some seniors don't plan for, and they find themselves in the hole when it comes time to pay Uncle Sam. An IRA doesn't have this problem. Thus, if retirement accounts are being split between ex-spouses, special attention should be paid to how much each person will actually receive once the taxman has been paid.
Finally, seniors should avoid taking out too much of their IRA at the beginning of their retirement. Some do this to avoid the 10 percent tax hit, but that money has to last the rest of one's life.
Divorce after 50 can already be a challenge. There's no reason to add money troubles to the mix. A Florida attorney with experience in high net worth divorce may be of service to seniors ending their marriages.
Source: Forbes, "4 Divorce Mistakes That Can Derail Retirement", August 21, 2013