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The financial impact of gray divorces

On Behalf of | Mar 22, 2018 | Divorce

Older New Jersey residents who want to get a divorce should be prepared to address how it will affect their retirement. Individuals who get a end their marriages later in life may find that they have less time to recover their finances.

For people 50 and older, the divorce rate is twice what it was in the 1990s. According to the Pew Research Center, for every 1,000 married individuals in 2015, 10 of them got a divorce. The research organization also reports that the rate of divorce among older individuals was higher among those who had remarried.

There are certain things individuals can do to repair their retirement assets. They may want to consider undergoing a collaborative divorce, which allows spouses and their attorneys to work together to arrive at mutually agreed upon solutions for their issues.For individuals who are already divorced, they may want to see if the changes in the tax law may justify engaging in renegotiations for new divorce settlement terms. Beginning in 2019, alimony payments will not be tax-deductible, and individuals who are receiving alimony will not have to pay taxes on the income. An ex-spouse may be able to pay less alimony, and the recipient will not have to subtract the taxes from the alimony that is received.

Individuals may also want to verify if they may be entitled to Social Security benefits based on the work record of their ex-spouse. That amount may be more than they would get if they used their own work record, assuming that the marriage lasted at least 10 years. All of these matters can be addressed in a divorce settlement agreement that is negotiated with the assistance of the couple’s respective attorneys.