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Late in life divorce affects retirement savings

The divorce rate for people who are older than 50 has doubled between the years 1990 and 2010. According to a study by Bowling Green University, one in four people who are currently going through divorce are over 50 years old. Older Georgia residents who are going through a divorce may have unique problems when it comes to property division, including the division of their retirement accounts.

While many people view a 401(k) or other retirement plan as an individual asset, these types of plans are often a large part of the property division in divorces. However, assets that are accumulated during the marriage are generally considered marital property and subject to division. Because older individuals are often more focused on acquiring the necessary funds that they will need for retirement, their retirement accounts may be more substantial than younger divorcing spouses. 

However, not all retirement savings are subject to being split. For example, if the person had the retirement account before the marriage, this portion of the fund will not be split. So the portion of the retirement account that was acquired before the marriage will not be subject to distribution, but the principal and interest that have been added to the fund since the marriage are subject to distribution. Some couples may opt to come to a settlement agreement regarding their retirement accounts, or they may choose to keep their own account and allow their spouses to keep their own accounts.

Retirement accounts may represent a large portion of the marital assets and should be treated with care. A Gwinnett County family law attorney may be able to assist a person going through divorce by trying to reach a settlement with the other spouse regarding property division.

Source: The Huffington Post, "Gray Divorce Drastically Cuts Retirement Savings By Thousands," Feb. 28, 2013

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