Baby boomers in Texas and across the country represent an age group with a rising divorce rate. The National Center for Family & Marriage Research found that between 1990 and 2014 divorces doubled for people age 50 and older. In the next age bracket of 65 and up, divorce rates tripled. When people at this age divorce, the division of retirement accounts can be a major concern.
The law recognizes marriage as a financial partnership. Even if one spouse accumulated all of the retirement savings, the other spouse will likely have a legal claim to half of an IRA, pension or 401(k) account. As with any distribution from retirement accounts, tax issues need to be considered. Once a couple divorces, each ex-spouse might land within a different tax bracket determined by separate incomes. Some financial experts recommend that people use after-tax figures when splitting accounts to achieve a roughly equal division of retirement assets.
Divorcees should also be weary of the temptation to accept a settlement that trades retirement funds for real estate. A sentimental attachment to a family home could undermine someone's ability to fund retirement. A lack of a retirement income combined with the expenses of maintaining a home could create additional financial hardship.
A person negotiating a divorce later in life could be near the end of peak earning years. Therefore, financial decisions should be made with a care. An attorney could advise a person about rights to certain assets and research how tax laws might apply. A lawyer could also address any questions about spousal support. During negotiations with the other spouse, the client could seek the opinion of the attorney before making decisions. If an agreement cannot be made, then the attorney could promote the client's interests in court.