Divorce can harm retirement plans

On behalf of Law Offices of Barry I. Finkel, P.A. posted in High Asset Divorce on Monday, September 10, 2018.

Marriage is one of the biggest and most important decisions in life, and a lot of planning goes into a successful wedding as well as a marriage. It's difficult to imagine separating or divorcing, but the event takes just as much planning even if it is not as emotionally safe or happy.

Married and divorced parents alike can agree that the most important issue in a marriage or after one is the well-being of the children from a relationship. But one issue that all married people have in common is a concern for their own future.

Retirement plans can be changed or even destroyed by the end of a marriage. Since Florida often described marital property as anything acquired during the marriage, retirement accounts or at least the funds saved during a marriage are subject to division by a divorce court judge.

Research shows that divorced couples have 30 percent fewer resources than married people, and the risk for divorced people of not having enough funds for retirement is 7 percent higher. Sound financial strategy can help both during and after a divorce, but people generally find themselves lacking resources compared to plans during marriage.

If people are concerned they cannot replace funds from a split 401(k) or another retirement account, they may consider additional savings in a taxable account. Sometimes, the smallest amounts can later lead to financial security.

Legal counsel is vital when a couple is preparing for divorce. An attorney can help represent unseen interests for individuals as well as work with others to shorten the divorce process. Legal advice can help soothe frayed nerves and raw emotion during a very difficult time.