Perhaps you and your spouse are facing divorce after decades of married life. You are in your 50s or 60s now and may not have thought about the many ways this will affect your future.
To begin with, a “gray divorce,” as it is sometimes called, will impact the plans you had for retirement. There will not be as much money to live on as you had hoped, and there are also other concerns.
Although Texas is a community property state, it follows equitable distribution in terms of divorce. You can expect a fair division of your marital assets, but the divorce will greatly diminish the retirement picture you once had. You will also face tax consequences. For example, you will pay tax on the withdrawal from a 401(k). In fact, if you take an early withdrawal, that amount may be subject to penalties. Another consideration is the marital home. You may think you want to keep it in a divorce settlement, but remember that there will be upkeep to manage, and you will have to pay property taxes. Think about liquid versus illiquid assets in terms of future financial security.
Rejoining the workforce
If you have been out of the workforce for some time, you may not realize how much it will cost to live by yourself and pay the bills without the help of a second monthly income. Learn all you can about your current financial situation and anticipate how it is likely to change once the divorce is final. In your later years, you no longer have the luxury of time in which to go back to school or start a new career. Still, even if the court awards you alimony, you may consider the wisdom of returning to work in some capacity because another source of revenue would likely be welcome.
The future in view
Retirement is closer than it used to be when you were younger, and the choices you make now will be different than they would have been years ago. Explore your options and obtain good legal and financial advice to help you make the best decisions for life after divorce.