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Divorce can take toll on retirement planning

The dissolution of a marriage is not an easy process. Not only does divorce take an emotional toll on those going through it, but it can also be financially upsetting. Retirement is one area that is especially impacted by divorce in New York and elsewhere.

Research shows that half of households might not have adequate retirement savings. However, among households where two spouses have divorced, the likelihood of having insufficient retirement savings is even higher at around 57 percent. The reason for this is that divorce can be financially devastating, thus causing those who experience it to fall behind in saving for retirement.

In light of this, it appears that a major shift is needed in how people think about retirement. Traditionally, people have focused on accumulating enough savings to retire in the future. Now, it may behoove them to also create plans for generating income during their retirement years. For instance, annuities may be helpful in that they offer guaranteed lifetime income that can supplement income from other steams of retirement income. Consulting a financial advisor or planner may be helpful for determining the best approach for planning for retirement following divorce.

From a financial standpoint, the ideal divorce situation is if two spouses can find common ground regarding the division of their assets during informal negotiations or divorce mediation. If they can make these types of processes work for them, they can avoid further court intrusion. An attorney in New York can provide the guidance needed to ensure that a divorcing spouse's financial best interests are protected during each state of this type of family law proceeding.

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