Many married couples envision what their golden years will look like: traveling, spending time with grandchildren and plenty of time for their favorite hobbies.
What they don’t expect is suddenly finding themselves divorced and living on a lower-than-expected income.
High stakes
“Gray divorce,” or divorce among adults over 50, has increased in recent years. Some of it may be due to the baby boomer generation entering their retirement years. While any divorce can present financial, emotional and logistical challenges, those occurring later in life can profoundly impact retirement plans.
Individuals at this stage of life have fewer working years ahead to recoup financial losses incurred during the divorce process. Secondly, the division of assets, including retirement savings, can significantly alter each party’s finances.
New Jersey follows the principle of equitable distribution during a divorce. Assets aren’t necessarily split 50/50. Instead, the judge considers several factors regarding the division of marital assets. This also applies to pensions, 401(k)s, IRAs and other investments.
Depending on the dynamics of the marriage, such as one person working outside the home while the other raised the family and took care of the house, one spouse might be entitled to a portion of the other’s retirement savings. This can result in a significant reduction in the retirement funds available to both parties.
Housing is also an issue. For many, the family home is not just an asset but a place of emotional significance. The decision to keep or sell the home involves weighing its sentimental value against practical financial considerations. Maintaining a property that’s too large or costly can strain limited resources. You may need to downsize your living situation.
Working with someone who understands the intricacies of gray divorce in New Jersey is essential. They can help protect your interests and work to ensure your financial future.
