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Retirement planning at play in divorce issues

On Behalf of | Mar 14, 2013 | Divorce |

Planning for one’s retirement is an important aspect of overall financial planning, especially as one ages. For Connecticut couples who divorce as retirement approaches, concerns about retirement funding take high priority, and can become one of the most essential divorce issues within the dissolution of a marriage. While divorce can be a challenging time, it is imperative that spouses make savvy decisions that meet their long-term goals.

One common mistake is to struggle over which party will retain the family home. While there may be a measure of equity built up in a real estate holding, getting the house is often not the best financial choice to be made. Homes come with carrying costs such as maintenance and taxes. In addition, real estate is not a liquid investment, and selling a home can difficult in a time of uncertain real estate values.

A better approach would be to focus on the existing retirement investments. Gaining a higher percentage of the family’s pensions, IRAs and employer-funded retirement vehicles can lead to a much better financial outcome than walking away with the house. This can be especially true for women, as one recent report states that a woman’s household income drops by as much as 41 percent following divorce.

When making decisions concerning divorce issues such as property division and retirement planning, the best course of action is to fully evaluate all existing choices. By keeping long-term retirement goals at the forefront of the decision-making process, Connecticut couples are better equipped to negotiate a divorce settlement that will allow them to retire comfortably. That holds true even if that retirement vision no longer involves one’s spouse.

Source: CNN Money, “Rebuild your nest egg after divorce,” Beth Braverman, Donna Rosato and Penelope Wang, Feb. 21, 2013