The Center for Retirement Research at Boston College released a report late last month. Its researchers concluded that it’s becoming increasingly difficult for divorcing spouses to maintain their retirement accounts.
They also argued that having to divide up a home at this point can be particularly crippling financially. In fact, the effects that having to split these assets up in a divorce can be just as consequential as the Great Recession was for families.
These warnings come at a time when the United States’ divorce rate is currently hovering around 40 percent.
The researchers relied upon their use of their proprietary National Retirement Risk Index program to assess how well people getting divorced now would be able to maintain their same standard of living they enjoy now once retired from their job.
Researchers determined that data from 2016 showed that nearly 50 percent of all families were at risk for not being able to afford their same lifestyle in the post-retirement era. If those same individuals became divorced in the years before leaving their jobs, then their risk of not being able to maintain a similar standard of living to which they are accustomed to now would increase by 7 percent.
The study’s authors argue that legal fees, transactions costs associated with buying and selling homes and spouses having to take off time to get their affairs in order or care for kids can all impact retirement savings. When alimony is added to the mix or costs now become the responsibility of one spouse instead of being split between two, it can make it difficult for them to make ends meet too.
When assets like retirement accounts are are stake, one of the first moves a petitioning spouse is likely to make is to file qualified domestic relations order (QRDO) to lay claim to a portion of the funds. A Fort Myers high asset divorce attorney may advise you that dividing up that account is not in your best interest and to offer something else in kind instead.