Thanks to everything from a more diverse workforce and evolving social mores to empty nests and a greater emphasis on wellness, more and more baby boomers are choosing to part ways with their long-time spouses.
In case you don't believe it, consider that the National Center for Family & Marriage Research has found that the divorce rate among couples over 50 doubled from 1990 through 2014, and tripled among couples over 65 during this same timeframe.
Given that boomer couples have no minor children and are likely gainfully employed, people might presume that these types of divorces typically proceed without conflict.
According to experts, this is not actually the case, however, as divorcing boomer couples frequently spar over alimony and the division of major assets. Indeed, the American Academy of Matrimonial Lawyers found in a recent survey that the two assets over which boomer couples were the most likely to fight were pensions and retirement accounts.
This conflict over things like 401(k)s, IRAs, etc. makes sense when you stop to consider that many boomer couples are nearing or actively considering retirement, and will need to be able to provide for themselves on their own during their golden years.
Interestingly, experts have identified a few factors that boomer couples should keep in mind concerning the division of their retirement accounts during a divorce:
- Any retirement assets accrued during the marriage will be subject to equitable division, such that it doesn't matter whether one spouse made this more of a financial priority or spent more time researching investments than the other.
- There are important tax issues that must be considered when dividing retirement assets, as they can have major financial repercussions. For example, money held in a Roth IRA is taxed at contribution while money held in a 401(k) is taxed when withdrawn.
- Proceed with caution when considering trading retirement assets for real estate like the family home or vacation property. That's because this real property can have hidden costs and diminish in value, while retirement assets can grow considerably.
As you can see, the division of retirement assets is an extremely complex topic. As such, divorcing parties should strongly consider speaking with an experienced legal professional who can answer questions, outline options and fight to secure a fair share of hard-earned retirement funds.