North Carolina residents who are 50 and older may be twice as likely to get a divorce as people in the same age group were in the 1990s. While the divorce rate is down among most age groups, it has increased for people ages 50 and older. These so-called “gray divorces” can jeopardize the retirements of the people involved in them because they have less time to recover financially and build up funds. Divorces for this age group can be expensive if the estranged spouses are fighting over assets.
There are a number of financial mistakes that people in this age group may be vulnerable to making. For example, they may want to keep the home because they are emotionally attached to it. However, it may be difficult to afford it on one income. Unfortunately, there are also expenses associated with selling the home.
It is also important to keep taxes and penalties in mind when it comes to retirement accounts and brokerage accounts. Withdrawals from 401(k)s and IRAs are taxed, and taking funds out before a certain age may also incur a penalty. Certain paperwork must be completed in order to split the money in 401(k)s and some other kinds of retirement accounts without penalty.
Whether a person is emotionally attached to a certain asset or feeling angry or guilty toward a spouse, it is important that these emotions do not drive the decision-making process. Discussing goals and strategy with an attorney beforehand can help. People may want to consider how certain decisions will affect their long-term financial security. For example, keeping the home in order to sell it within a few years might be a good strategy if the home has appreciated considerably.