While considering the details of their divorce, many New York spouses fail to give the proper attention to their retirement planning. The two topics may seem unrelated at first glance, but they are in fact intertwined. The outcome of one’s property division settlement can have a huge impact on retirement funding, and smart spouses will include retirement planning in their negotiation strategy.
When determining the division of marital assets, individuals must begin with a working understanding of their projected retirement income. For those who feel that they may need additional financial help during retirement, it makes sense to pursue investments during the property division process. These types of assets will provide a better income stream in later years, as opposed to the family home or personal property.
Many spouses are unaware that they will be able to claim Social Security benefits against the work record of their ex. This is true only when the marriage lasted at least ten years, and when the divorce has been final at least two years prior to making the initial claim. Claiming these benefits can allow an individual to postpone claiming against their own record, which allow the payment level to grow as time passes.
However, in order to maximize one’s Social Security benefits in this way, it must be financially feasible to get by on the Social Security spousal benefit while the individual benefit grows. This requires advance planning, and the acquisition of other income-producing assets. For those in New York who can take a big-picture approach to divorce and property division, it is possible to structure an agreement that will ensure financial stability as retirement approaches.
Source: Fox Business, “5 Ways Divorce Can Impact Your Social Security Benefits“, , May 13, 2014