Divorce is just as much a financial and legal process as it is an emotional one. The financial implications of ending a marriage can be significant, but it is still possible to minimize undesirable outcomes. For example, couples in Illinois who are divorcing after decades of marriage should pay careful attention to complex assets such as retirement plans. Even the division of something as seemingly simple as a 401(k) can become a foundation for financial security following divorce.
Securing retirement funds is particularly important when it comes to gray divorce. Gray divorce — which refers to divorce involving couples over the age of 50 — is becoming more common in the United States. Between 1990 and 2019, the rate of divorce for this age group doubled, which has some troubling financial implications. According to the National Center for Family & Marriage Research, a person who divorces after 50 is likely to see his or her wealth cut in half.
It is true that adults younger than 50 also experience financial setbacks after divorce, but these individuals generally have longer to recover and rebuild wealth. A person nearing retirement does not have time on his or her side when it comes to rebuilding wealth and assets. This is especially true for retirement savings, which most people spend decades contributing to.
Dividing retirement plans during divorce can be more complicated than some may realize. Each person must consider his or her individual needs as well as ability to recover financially. This may feel difficult, and it is understandable that some people in Illinois might be hesitant about moving forward with divorce. Speaking with an experienced attorney can help worried individuals address those concerns and fears.