Did You Know Divorce Could Hurt Your Retirement in Cherry Hill, NJ?
Divorce is a word that no one wants to hear their spouse utter even if you know the marriage is not headed in the right direction. Once a couple decides that it’s time to end the marriage both should begin preparing for what’s to come. This will be a scary, stressful time for both of […]
Divorce is a word that no one wants to hear their spouse utter even if you know the marriage is not headed in the right direction. Once a couple decides that it’s time to end the marriage both should begin preparing for what’s to come. This will be a scary, stressful time for both of you but you need to look past the present and into the future. Why is the future so important? For starters, you need to look at your retirement wealth no matter your age. Why? Divorce can play a major role, and a negative one at that, on your retirement. Let’s take a look at how this is possible in today’s post.
The Negative Impact on Retirement in Voorhees, NJ
The impact that divorce can have on your retirement is quite negative if you don’t plan for it ahead of time. We will get to the planning topic later. First, let’s look at the way divorce negatively impacts your retirement, according to the Center for Retirement Research. The biggest negative impacts include the following:
- Keeping two homes long-term with increasing costs
- Legal fees and other divorce expenses
- Selling the family home, which might occur in an unfavorable market
- Possible increase in taxes
- Dividing financial and retirement assets between two homes
- Reduced available credit for both spouses
- An increase in the difficulty to save money
When you calculate all of these negative factors you find that divorced households have 30 percent less average retirement wealth compared to households that are still in a marriage. A divorced household also has more risk for retirement insecurity when it comes to finances compared to a household still in a marriage (53 to 48 percent).
Tips for Protecting Retirement Assets in Lindenwold, NJ
There are a handful of things you can do to protect your retirement assets after a divorce. They are as follows:
- Negotiate divorce without the courts: when this happens you avoid having a judge make decisions for you regarding the division of assets. If you can achieve an out-of-court settlement you will save a lot of money.
- Stay married for 10 years: reaching the 10-year mark does not mean you will be married until death. Instead, it means that you are eligible to claim benefits from Social Security on your former spouse’s record.
- Understand your rights: it’s important for you to understand your rights as a divorced person. This includes the ability to acquire funds from a 401(k) upon retirement, not divorce, through a Qualified Domestic Relations Order (QDRO).
- Change how you live: don’t be fooled; you will need to change how you live once you are divorced. You are now paying for two households and there’s only one income supporting you. Make changes and do your best to put money away for your retirement, especially if your accounts were depleted with the divorce.
Divorce is one of the most difficult events a person can endure during their lifetime. If you prepare financially while going through a divorce it can go a long way towards protecting your retirement wealth.
Contact a Medford Family Law Attorney for a Consultation About Divorce in New Jersey Today
If you are thinking about filing for divorce, or if you have already started the divorce process and are dealing with another matter such as child custody, child support, or division of assets, you need to speak with a qualified attorney. The New Jersey family law attorneys at Davis & Mendelson represent clients throughout the state, including Camden, Cherry Hill, Gloucester Township, Winslow, Pennsauken, Voorhees, Lindenwold, Haddon Township, Collingswood, and Haddonfield. We understand how challenging this time can be for you, which is why we will fight hard to protect your interests, and the interests of your loved ones, throughout the legal process. Call us at 866-560-9512 or fill out our confidential contact form to schedule a consultation. We have an office conveniently located at 1200 Laurel Oak Road Suite 101 Voorhees, NJ 08043.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.