The divorce rate for people who are at or over age 50 has been increasing for the last few decades. When older Michigan couples divorce, they face additional issues because they will have less time to save for their retirement. It is important for them to plan carefully so that they can maintain their ability to retire on time.
Pew Research reports that the divorce rate for people who are 50 or older has increased by approximately 100 percent since the 1990s. Recovering financially after a divorce is harder for older people. They may have assets that are fixed and have already maximized their earning potential.
People who are older may also have accumulated substantial assets, but they may face tax consequences that could decimate their value if they do not divide them correctly in their divorces. For example, when an IRA is divided before the spouses reach age 59 1/2, the withdrawals may be taxed at high rates, and 10 percent early withdrawal penalties may be assessed if they are not divided pursuant to a divorce decree. People who will receive funds from their former spouses’ IRAs or other retirement accounts may also be taxed unless they roll the funds over into their own retirement accounts.
Older people who want to get divorced in Oakland County might want to consult with experienced Michigan divorce attorneys who can advise their clients about the potential tax consequences that they may face with different types of asset division scenarios. They may also help their clients to plan for their post-divorce lives so that the clients may protect their ability to retire. Divorce attorneys may negotiate full property settlement agreements on behalf of their clients that help to protect their financial security.