Dividing Retirement Accounts in an Illinois Divorce Can Derail Your Plans for the Future

Illinois divorce lawyersCouples who have raised children often look forward to their retirement years because they consider it well-earned time together. However, many baby boomers are finding they are no longer compatible with their mate, or that they no longer want to spend all that uninterrupted time with one another. In fact, divorce rates for those over the age of 50 have more than doubled in the last decade. Unfortunately, that increase in divorce is creating some serious financial issues for this demographic group – sometimes to the point that it completely derails their plans for retirement. Learn how a seasoned Illinois divorce lawyer may be able to help you protect your assets and increase the chances of a healthy financial future during your gray divorce.

Divorce, Retirement, and Your Pension Plan

When parties plan for retirement, they are generally only accounting for one set of expenses. Divorce can double the expenses, and it requires that the parties split whatever assets they have. In short, there is less money to go around, and more expenses to cover. For some, this may mean downsizing or living a less luxurious life during their retirement years. Others may have to give up plans that they had made (i.e. traveling). Still, there are some who may be at a significant risk for divorce-induced poverty. Whatever your circumstance, rest assured that there are strategies that one may use in divorce to help protect their assets and financial future.

Tips for Protecting Your Retirement in a Gray Divorce

In most divorces, retirement pensions are divided equitably between the parties, meaning they are divided according to what the law considers “fair.” Various factors, such as the duration of the marriage, total value of the marital estate, and the contributions made by each party are used in the determination. As such, it is critical that parties have an accurate valuation of their estate. It is also important to ensure that all contributions – monetary and non-monetary – are accounted for when developing your divorce strategy.

Even still, parties should understand that the loss of pension funds can have a significant impact on their financial future, especially when it occurs when one is already retired or nearing their retirement. Parties can minimize this impact by utilizing a few key strategies, such as:

  • Downsizing their life (i.e. selling the family home);
  • Discussing one’s financial situation with an attorney to determine which marital assets may offer the greatest long-term benefit;
  • Delaying retirement so that there is more time to save;
  • Taking up a side job to save for retirement;
  • Rolling over retirement pensions instead of taking a cash payout;
  • Ensuring pension accounts are divided according to the plan’s rules;
  • Requesting alimony if you are a disadvantaged spouse; and
  • Offering another asset in lieu of alimony if you expect to pay spousal maintenance.

Contact Our Wheaton Divorce Lawyers

At Stock, Carlson, Oldfield & McGrath, LLC, we work hard to protect the financial futures of our clients. Seasoned and experienced, our DuPage County divorce attorneys always pursue the most favorable outcome possible, regardless of the circumstance. To get started on your case and schedule a personalized consultation, call our offices at 630-665-2500 today.

Sources:

https://www.washingtonpost.com/news/get-there/wp/2018/03/26/a-gray-divorce-can-devastate-your-retirement-plans-heres-how/?utm_term=.c30acdb0048b

http://www.chicagotribune.com/business/sns-201808091333–tms–kplngmpctnkm-a20180829-20180829-story.html

 

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