Many Spokane readers may be aware that filing for divorce later in life will likely affect your retirement security. However, Baby Boomers continue to be the most popular generation to dissolve their marriages and it is possible to end a marriage and preserve much of what you have invested into your retirement savings.
In order to minimize the effects of dissolution of marriage on retirement plans, very close attention must be paid to the division of assets and retirement savings. It is important to work with a qualified family law professional to understand the particular financial implications of your pending divorce, but a recent news article provided several basic steps that can help keep retirement on solid ground.
The advice included the following:
• Establish your own credit. It important for both spouses to do this even in a healthy and happy marriage. This can be accomplished by each person having their own accounts. A credit history independent from your spouse may become vital if you divorce or your spouse dies.
• Close joint credit accounts. This is a cautionary measure to be taken during or before a divorce in order to prevent your credit from being scarred by a spouse who racks up debt. Make sure to close all joint accounts and divide existing debt. This may require the assistance of a family law attorney.
• Seek important insurance coverage. Appropriate health and long-term care insurance are important for your quality of life, especially during retirement years.
• Learn about rights to pension, Social Security: It is possible that in the event of divorce, you may be eligible for a portion of your ex's pension or Social Security benefits. This may also require the assistance of an attorney to educate you about your particular rights to these benefits.
Source: Wall Street Journal, "When Divorce Unravels Your Retirement Plans," Ruthie Ackerman, Dec. 24, 2011