• 29
  • March
    2011

Contrary to popular belief, a high divorce rate is not just confined to the younger generation of Americans. In fact, statistics from the National Center for Family & Marriage Research at Bowling Green State University show that while the overall divorce rate in the U.S. has decreased over the last 20 years, the divorce rate among people age 50 and over - the baby boomer generation - has actually doubled. This is significant because many divorcing older couples, unlike their younger counterparts, have accumulated sizeable assets over the years and will probably want to utilize certain asset protection strategies in the event of a divorce.

Today's post, the first in a series, will briefly examine some of these asset protection measures.

Retirement funds & taxes

One of the most prized possessions of divorcing baby boomers is likely the retirement nest egg they have been carefully cultivating over the past several decades. These pre-tax retirement accounts, such as 401(k)s or traditional IRAs, are viewed by many as the key to a happy and healthy retirement that is just around the corner.

Accordingly, it's important that both sides understand the real value of these pre-tax retirement accounts.

Since taxes have not yet been levied upon these accounts, the balance as printed on the monthly statement sheets is not an entirely accurate depiction of how much the retirement account is actually worth.

The consensus among financial experts is that a 401(k) and/or traditional IRA is typically worth about 65 percent of what is indicated on the monthly statement sheet, meaning it's after-tax value.

This is an important consideration in property division negotiations, as couples are attempting to negotiate an equitable split of finances.

To be continued ...

Stay tuned for more from our Denver divorce blog ...

If you would like to learn more about divorce or asset protection, you should strongly consider speaking with an experienced legal professional.

This post is provided for informational purposes only and is not to be construed as financial or legal advice.

Related Resources:

Divorce over 50: 3 mistakes to avoid (SmartMoney)