Divorce isn't just an emotional affair, it is also a financial affair. Not only are assets such as bank accounts and retirement plans divided, but in some cases spouses in Mississippi are moving from a two-income household to a one-income household. For many individuals, this is a very challenging part of divorce, particularly if they have been married a long time.
Following a divorce, it may be necessary to keep your lifestyle expectation in check. You may find that you cannot spend as much as you had while married, as you can now that you're are divorced. Married couples living together share the costs associated with the household, such as the rent or mortgage, water bill and electric bill. However, once divorced each party must pay for these expenses on their own. It may be tempting to dip into your retirement account to meet your post-divorce expenses, but this could bring financial hardship in the long run.
In addition, people who divorce later in life may find that they need to work longer than they had planned, pushing of retirement to a later date. Newly divorced individuals may need to stay in the workforce to pay for their post-divorce expenses. They may also need to keep working so they can pad up their savings account. This is especially true if one spouse had stayed out of the workforce while married, and now finds themselves working for the first time in many years.
Some couples who divorce later in life may find that pensions and Social Security income are an important part of their retirement. If a couple was married for over a decade and are over age 62, then one spouse may be able to collect Social Security benefits based on their ex's benefits, unless the collecting spouse remarries. However, in order to have a right to part of one's ex's pension, the spouse who does not own the pension needs to have a qualified domestic relations order in place.
These are only a few of the financial aspects couples seeking a divorce later in life need to keep in mind. But no matter what your age, it is important to understand how the end of a marriage will affect your future. A family law attorney may be a good source of advice in these situations
Source: The Fiscal Times, "Don't Let a Late-Life Divorce Ruin Your Retirement Plans," Janna Herron, May 4, 2016