When a Pennsylvania couple gets married, they expect to grow old and retire together. Unfortunately, there are many couples who won’t make it to that point before their marriage ends in divorce. One of the assets that will be affected by this is the retirement accounts that the couple was building together.
There are many financial challenges for individuals when they get divorced. The sharing of two incomes for one home becomes two homes with one income for each. Most people end up living on half or less than they did when they were married.
Retirement accounts are affected in much the same way. Often, those accounts are split between the parties. This greatly diminishes the amount of retirement funds each individual has available, and building those amounts back up may take a long time if it happens at all.
Many people may end up not even being able to contribute the same amount to their retirement as they did prior to the end of the marriage. Living on only one income can be challenging, and the extra money that would otherwise be going into a retirement account may be needed to pay for necessities. This situation could be temporary or permanent depending on each party’s financial situation.
The financial impact of a Pennsylvania divorce may not only affect each party’s present, but his or her future as well. That does not mean, however, that the financial issues brought about by divorce are insurmountable. It may be possible with some financial planning at the time of the divorce to recover as much as possible of the lost retirement account in the time available to rebuild it.
Source: thesouthern.com, Calculating the high costs of divorce, Joe Plemon, Oct. 10, 2013