As people in Ohio move toward retirement age, they may expect their financial decisions to be simpler and less complicated. However, as more people decide to divorce later in life, there can be a new twist in their retirement plans. In the past two decades, divorces between Americans over the age of 50 have doubled, a trend that shows no sign of stopping. These splits have been dubbed “gray divorces.” While retirement funds are a significant marital asset for couples of all ages, they take on a particular importance the closer people are to retirement age.
Divorce for people over 50 can be complicated because both parties have relatively few working years left to make up for the cut to their retirement balances. It costs more to support two single households on the same amount of money that was previously planned to support one joint retirement. For couples of all ages, even those with significant assets and high net worth, the most important assets to be considered in a divorce are their retirement funds and the family home.
In some cases, one individual may keep the home while the other person receives the same amount in a retirement or investment account. However, taxes also need to be considered when seeking a fair division. If people will need to pay taxes on one of the assets later on, this should be taken into account in the settlement. This is also true of different types of retirement accounts. Roth IRAs have already had taxes taken out while 401(k)s and traditional IRAs will be taxed on distributions.
Divorce can be complex at any age, but the special circumstances of gray divorce require additional attention. An attorney specializing in family law can work with a divorcing individual to advocate for a fair settlement on a range of issues, including spousal support and property division.