Some people can be tempted to start focusing on the short-term issues during a divorce. This is an understandable impulse since a divorce causes many immediate changes in a person's life. However, it is also important to keep one eye on the long view throughout the process. One of these issues is retirement planning.
Spouses plan to spend their lives together, and those plans can often start well in advance. This means that retirement plans are an important part of the divorce conversation. This is especially true now that gray divorce, divorces among people over 50, is becoming more of a trend. Fortunately, there are a variety of strategies people can use to help make sure that their divorce does not derail their golden years.
Long-term thinking is one of the key parts of protecting retirement plans during divorce, but this can manifest in many different ways. One great example of this is the struggle over who gets the house. A marital home holds a lot of memories for people, and most people going through a divorce have a strong emotional attachment to it. Beyond that, there can be practical value to keeping the house, like keeping the kids in the same school district easily. Yet, many people overestimate the value of these benefits, and fight tooth and nail to keep the home for themselves. This can often result in their trading away retirement assets, since they will not be able to use them for so many years. This can be a big mistake that can affect how much a person has during retirement, especially if people end up sinking money into fixing a home or paying high property taxes on it.
Pay Attention to Liabilities
Dividing up marital property is about more than just figuring out who gets the house and who gets the car. The marital debt has to be divided up as well. This can be an important part of the process for retirement purposes. Making sure that each side ends up with an equitable amount of debt is simple enough, but things like interest rates and loan terms start to make the issue more complicated. It is important to pay close attention to who gets which debts, so that it does not end up as a nasty burden that keeps someone from retiring.
Make a Budget
Once the divorce is over and the dust settles, it is important to get back to a normal routine. Part of that involves making a new budget to account for the loss of the other spouse’s salary as well as his or her expenses. Setting up a budget is always good advice for retirement planning, but it is particularly important for people dealing with the changed circumstances of divorce.
Divorce is a complicated process with many moving parts and long-range effects. Fortunately, you do not have to go through it alone. Contact an experienced DuPage County family law attorney
today to learn more about the practicalities of the divorce process.