Baby boomers going through a divorce are discovering that the process can end up costing them a large share of their retirement. Financially, neither party will emerge from divorce with the exact same standard of living, as couples often split their shared assets. The financial issues associated with property division become more complicated when retirement assets play a large part in the proceedings.
Wisconsin residents live in one of the few community property states in the country. This means that a court will, for the most part, split marital assets equally between the parties in the divorce. However, not everyone going through a divorce knows what to ask for and it can be difficult to split all the assets in a way that ensures that all things are as fair as possible.
It is important for those go through a divorce to come up with a financial plan and long-term goals for their personal finances, which can include assets such as retirement benefits or real estate. This is a way to ensure both parties are left with enough funds to allow them to live comfortably in the long term.
Many things need to be considered to ensure those long-term goals. The long-run costs of possible child support and spousal maintenance, even for aging baby boomers, should be included in a plan. A person going through a divorce may want to create a budget, protect their current assets through proactive planning and learn what they are entitled to in the property division process.
A divorce can take a toll both financially and emotionally, but there are definitely ways to reduce the costs of both. Couples that are aware of their future financial goals and needs may be able to negotiate a suitable division of marital assets. Also, mediation may be a viable way to avoid stress and emerge from the divorce process in a strong position.
Source: Fox Business, "Graying Divorces: What Boomers Need to Know to Protect Their Assets," Andrea Murad, May 25, 2012