Divorcing residents in Maryland who are over the age of 50 or even over 60 when their marriage ends should take the time to consider just how their financial world will change. Getting a divorce when near or at the age of retirement can have severe financial consequences for people. No longer will they have the nest egg they thought they would have to retire on as assets will likely be split in some fashion during the divorce.
Spouses in their 50s or 60s also have fewer working years to make up their losses than do their counterparts in their 30s or 40s. When it comes to negotiating how to split retirement assets, Kiplinger notes that people should assess the pros and cons of receiving assets that have already been taxed, such as an IRA, compared to those that will not be taxed until the benefit is received, like a 401K. The net amount of funds received may be very different even if the current values of the funds are the same.
Forbes adds that divorcing spouses should not hyperfocus on their current cash flow and living expenses but, rather, they should take a long-term view of what they need financially. Certainly, it is important to be able to make ends meet today but that should not be done at the expense of one’s future needs.
It is also important to avoid being emotionally pulled to keep assets like a house that may end up costing far more to maintain than is reasonable given a person’s new single financial reality.