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Retirement savings and divorce

| Jun 25, 2019 | Divorce |

Couples in Kentucky who are getting a divorce should be prepared to devise a new retirement plan. The plans they had when they were married are likely to have to change. Depending on their situation, some people may find saving for retirement will be easier as they will only have to consider themselves when saving. However, they also have to keep in mind that no one else will be contributing to their savings, and they will have to bear expenses on their own.

After their divorce has been finalized, divorcees should take the time to work on a budget for their retirement costs. It is best to wait until after the divorce as they will have a better picture of how much they are actually spending. They should determine their estimated life expectancy and subtract the age at which they would like to retire in order to obtain an estimate of how long their retirement will be. A sum of all of their predicted annual living costs should be obtained and then multiplied by the number years they expect to be in retirement; an additional 3% per year should be added to account for inflation.

Using a retirement calculator may be helpful. Divorced individuals may also use it to determine what monthly amount has to be saved in order to reach their goal. They should also subtract any expected funds from a pension or Social Security to determine how much they should be saving by themselves.

An attorney who practices divorce law may assist clients with obtaining their desired settlement terms regarding the division of certain financial assets, such as retirement accounts. The attorney may consider the assets of both parties and advise clients about which assets and how much of those assets they may be entitled to.

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