Most Floridians going through a divorce understand that the process can have a wide range of short-term financial and emotional effects. What’s less apparent is how it can affect one’s long-term retirement goals. According to research by the Center for Retirement Research at Boston College, households that have been through a divorce have a 7 percent greater risk of not being able to maintain their standards of living in retirement.
One of the fundamental reasons for this increased risk is losing the benefits of economies of scale. Married couples usually share expenses like rent and utilities, but individuals responsible for all their bills bear the full costs. This means there is usually less money available for retirement investments. Divorce for couples over the age of 50 can be particularly challenging due to the relatively small amount of time available to make up for lost assets.
Saving for retirement could get even more difficult for some divorcees due to the recent changes in the tax code. For divorces occurring in 2019 and beyond, payers of alimony will no longer be able to deduct the payments from their taxes. As a result, they may have to reduce payments or deal with reduced retirement savings.
In divorce proceedings, a lawyer will seek to protect the client’s short- and long-term financial interests. Financial arrangements between spouses can often be made outside of court, but disputes sometimes result in a judge or jury making the final decision. A lawyer may use a wide variety of resources to ensure a client gets a fair chance at a positive outcome in or out of family court.