Louisiana residents who are at least 50 years old and are thinking about getting a divorce may be concerned about how it may affect their retirement. However, there are steps they can take that can mitigate how much harm a divorce may have on their financial security for retirement.
Before they make any financial decisions, older divorcing adults should be aware of the tax implications. It is important that they know what they have in pretax and post-tax assets and how those assets are likely to be taxed throughout the years.
Once their divorce is finalized, older adults should be aware that their filing status will change. For individuals who are legally separated from their spouse or who are not married on the last day of the year, their filing status will be single. As a result, their standard deduction will be reduced by half, and it is likely that they will have use a higher tax bracket when calculating their taxes.
Another important step older divorcing individuals can take to protect their retirement is to make the most of their retirement income. This means understanding all of their financial options.
Even though Social Security payments are not classified as community property, individuals should carefully consider how they will file after their divorce. Both the length of their marriage and when they file are factors on how much benefits will be issued. Divorcees should research carefully to understand how much they may be able to get and should consult with a financial adviser before making a final decision.
A family law attorney may assist older adults with resolving divorce legal issues that may affect the financial assets intended for their retirement. Negotiation may be used to obtain favorable settlement terms regarding the division of financial assets, such as retirement accounts and pensions.