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Financial Considerations for Couples Divorcing Near Retirement

On Behalf of | Jun 10, 2019 | Divorce, Property Division |

The rate of divorce among adults over 50 has skyrocketed over the last twenty-five years, rising by 109%, according to the Pew Research Center. Whether it is due to increased financial independence for women or longer, healthier lives due to better healthcare, it seems this trend is unlikely to go away.

In some ways, divorce is easier for older couples because they are far less likely to encounter issues of child custody and child support. However, in longer marriages there are often significant financial implications to be aware of when considering separation and divorce.

Dividing retirement funds


Under North Carolina’s equitable division approach to marital property, a couple’s assets and debts are divided equitably between spouses. Since marital property includes nearly everything acquired during the marriage, most people will find their retirement account included in property division when they divorce.

In most cases, a 401(k) or pension plan is addressed in a divorce using a Qualified Domestic Relations Order (QDRO). A QDRO is a court order that modifies a retirement fund to have an additional payee, usually a spouse who was financially dependent during the marriage, so that the transfer of funds is considered to be a tax-free incident to divorce.

Increased costs due to living separately

Something often overlooked in discussions of divorce is the increased costs of operating two households after the divorce. For those nearing retirement, this issue might make delaying retirement necessary. For those already retired, these increased costs might mean one or both spouses must reenter the workforce.

Anyone facing a divorce has many important decisions to make. Those nearing retirement should pay special attention to the financial impact of splitting up. By consulting with a North Carolina divorce attorney, they can gain a better understanding of their options.