How to Manage Divorce or Separation in Retirement

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Divorce, separation or remarriage after retirement has financial and emotional consequences, according to a report recently published by the Society of Actuaries (SOA). Lifestyle needs, like housing, companionship and care, will also be altered, according to the report.

In an interview, Cindy Levering, a member of the SOA’s Committee on Post-Retirement Needs and Risks, discussed this risk and the ways to manage it.

While this is a personal issue, retirees need to engage professionals that can assist them in knowing their rights and assessing the value of assets and income they may receive from divorce proceedings, the report states. “Attorneys, accountants and financial planners exist who specialize in divorce law and financing,” according to the report.

At divorce, the report notes that the law allows for a split of private pension plan benefits covered by ERISA. “For this purpose, divorcing spouses need a properly drafted legal document: a qualified domestic relations order (QDRO),” according to the report.

Social Security pays benefits, similar to spousal benefits, to a former spouse after divorce if the couple was married for 10 years or more. “However, divorced spouse’s benefits generally end upon remarriage,” the report notes.

And the report notes that older couples who marry, especially those with children, may want to establish a prenuptial agreement that defines each party’s rights to distribute or dispose of property as they wish, not as a court would decree, in event of divorce.

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