New Yorkers preparing for divorce can expect to see cascading financial effects over their lifetimes, indicated a study by the Center for Retirement Research at Boston College. While many people choosing to end their marriages fully expect an array of short-term financial, emotional and practical repercussions, the effects can linger over the years, especially when people who have been divorced don’t make changes to their financial planning as a result. In particular, this study examined people’s readiness for retirement, looking at how divorce impacted people’s ability to maintain their standard of living after leaving their jobs.
The CRR uses its metric, the National Retirement Risk Index, to examine the number of households across the country that could be at risk of being unable to maintain their current standard of living after retirement. In particular, the study noted that while approximately 50 percent of all American households face some form of retirement risk, that figure is 7 percent higher for households that have been through a divorce at some time.
There are a number of issues that can impact a person’s retirement readiness. When divorce happens later in life, and especially over the age of 50, there can be less time to financially recover from the changes caused by the end of a marriage. Retirement accounts are often some of the most significant marital property divided during a divorce, and there is less time to rebuild these accounts for people who separate shortly before it is time to retire.
Divorce can be accompanied by an array of financial changes that are important to keep in mind, especially during the property division stage. A family law attorney may be able to help his or her clients by advocating strongly for their interests and working to achieve a fair settlement on matters like spousal support, asset division and other key concerns.