Divorcees may have less when it comes time to retire
The National Retirement Risk Index was created in 2006 by the Center for Retirement Research in order to measure the percentage of households that are at-risk of a lower standard of living after retirement. Michigan residents who are approaching divorce might want to know that the risk of a lower standard of living is 7 percent higher for divorced people. Individuals usually must deal with higher costs of living per person because marriage allows for certain economies of scale.
Married couples share expenses for things like housing and utilities, and they have to cover these costs alone after divorce. The incidence of divorce while nearing retirement age, sometimes called gray divorce, has increased in recent years. The overall rate of divorce in the United States has leveled off more or less, but the rate for people at least 50 years old doubled between 1990 and 2010.
Changes in the way alimony is treated by the Internal Revenue Service may have a powerful impact as well. Beginning with divorces that are finalized in 2019, alimony payments will no longer be taxed as income to the recipient, nor will they be deductible by the payer.
For people who are ending their marriages, an attorney may be able to help. An attorney with experience in divorce law might be able to negotiate the terms of asset and liability division and file a petition to begin the divorce process. An attorney might attempt to identify money or assets that one spouse has attempted to hide from the other, or argue on the client’s behalf during child support or child custody hearings.