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Planning for retirement after divorce

| Nov 8, 2016 | Divorce |

Virginia law provides for the equitable distribution of marital property as part of a divorce. However, the change in circumstances and their attendant expenses often mean that one or both partners are severely financially affected. This is particularly true for divorcees who are nearing the age of retirement.

The end of a marriage can lead to a substantial decrease in wealth for both parties. Reports show that men tend to lose between 20 and 25 percent in come, while women lose somewhere around 40 percent. This can have serious effects on retirement, especially when the divorce occurs later in life.

Although expenses may be cut and new sources of income might be added, it is important to address questions of future financial planning during the divorce process. Many of these issues could be solved more favorably to both departing spouses when they can work in concert. Although it is difficult to judge the emotional factors at play within the dissolution of a marriage, couples that can maintain some sort of working relationship often find themselves better situated with pensions, retirement savings, Medicare and Social Security.

Forensic accountants, financial planners and mediators may all have their place in protecting the economic well being of a divorcing couple, and the options that they may provide have the potential to lessen the stress on both parties and lead to a more equitable outcome all around. An attorney representing a divorcing client may first try to negotiate an overall settlement with the opposing party. If that proves to be fruitless, mediation may be in order.