We Treat You Like Family

Divorce can affect readiness to retire

On Behalf of | Jun 25, 2018 | Divorce |

People in Missouri who choose to divorce could face economic effects that linger over the years, even long after the divorce was finalized. While many people who plan to divorce are well aware that the end of a marriage can be accompanied by difficult financial, emotional and practical changes, one study has pointed out that divorce can impact retirement readiness. In a study by the Center for Retirement Research at Boston College, researchers found that individuals who had been through a divorce were 7 percent more likely to face a risk of financial crisis upon retirement.

The research center is the developer of the National Retirement Risk Index, which measures the likelihood that households of working age will continue to maintain their standard of living after retirement. Retirement risk is common throughout the country; around half of all Americans face some level of risk of financial difficulties after leaving their jobs, a risk that was shown to be escalated due to divorce.

There are a number of reasons for this result. In the first place, retirement accounts are often the largest single asset to be divided in the divorce. It can take a significant amount of time for each spouse to rebuild their retirement funds. The later in life that people divorce can also affect their potential for retirement risk; people who divorce closer to retirement age have less time to improve their personal retirement savings. Single people can also be required to spend more than married people because key costs, like housing, are not shared.

During a divorce, decisions that are made during negotiations toward a settlement on property and financial issues can impact an individual for years. A family law attorney may advocate for their client in family court to achieve a fair settlement on a range of issues, including property division, spousal support and child custody.

FindLaw Network
St. Louis County Bar Association
Illinois State Bar Association
LEX | The Missouri Bar