For Colorado couples who are getting a divorce, the issues they must consider might seem overwhelming. However, because there are different factors involved does not mean that any one of them should be ignored. Finances can be a major concern with division of assets, asset distribution and other matters coming to the forefront. Recent research has shown that retirement savings can be a casualty in a divorce. Having legal assistance to prepare for this eventuality can minimize the damage it can do to both parties.
The Center for Retirement Research at Boston College examined how those who are no longer working and become divorced will see their standard of living change. Since an estimated 40 percent of marriages will end in divorce, these are key factors. Retirement savings are at a 7 percent greater risk since 2016. To put that into context, the financial crisis from a decade ago raised the risk by 9 percentage points. Also, the average net worth of families who have divorced was slightly more than $100,000. In families where there was not a divorce, it was $132,000.
There are many reasons why a divorce depletes retirement savings. Childcare, missed time at work to take care of legal issues, the sale of property and the accompanying costs, and the division of those retirement savings are a few. Expenses can unexpectedly rise as the divorcing parties will need to pay their own expenses rather than share them. Also, tax rates will be higher for people who are living alone. When there are alimony payments, that can hinder savings.
Of course, there are certain benefits. Receiving a share of a 401(k) account and not being forced to pay taxes on it is one. For many, the end of an unhappy marriage makes it worth the financial concerns that will inevitably accompany it. For these issues and other worries related to a divorce, a law firm that has experience in all areas of the process can be of assistance and should be contacted as soon as possible.