There are many financial complications that can accompany divorce, especially for Connecticut residents who decide to end a marriage later in life. While the American divorce rate is no longer rising, this is not true for people over 50. Between 1990 and 2010, the divorce rate among this group has doubled, and the trend is continuing. When people divorce later in life, they have less time to regroup financially. In addition, retirement funds are often split in a divorce. This can hinder retirement plans for many people aged 50 and up.
People who are planning to divorce may benefit from considering a number of key financial issues, including their ability to save for retirement. The Center for Retirement Research at Boston College developed a retirement risk index to measure the number of Americans at risk of a deteriorating standard of living after retirement. They found that around half of all Americans are at risk of financial problems after they leave their jobs. This is escalated after divorce. In fact, those who have been divorced are 7 percent more likely to face financial difficulties upon retirement.
The reasons for this problem go beyond the division of retirement funds during asset division in a divorce. When people are married, they can direct their income to shared resources like housing and even transportation and food. Once divorced, those costs rise because the former spouses no longer benefit from an economy of scale. When it costs more to keep up the same standard of living, people are able to save less for retirement.
Divorce can be accompanied by a range of financial difficulties and problems. However, a family law attorney could work with a divorcing spouse to help protect their interests during the asset division process.