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Important financial aspects of grey divorce in Massachusetts

Couples in Massachusetts may be considering divorce at an older age, which poses some particular issues that may not always be the primary concerns of younger couples. Older couples facing divorce, also commonly known as a grey divorce, tend to have financial issues that directly affect retirement savings or planning.

A recent Huffington Post article outlines some of the specific factors that older couples may be facing. These factors may include lower overall income or having to work until an older to age to account for a lack of income. Financial matters may be especially important for grey divorces, because couples may have combined accounts and have made financial planning based on shared primary residence. Therefore, it may pose a perceived or real financial hardship for either party to live individually after separation or divorce.

From a gender perspective, women may be more prone to fears of being able to afford retirement overall. This is likely a factor that will add to any worries when a divorce is also on the horizon.

One common pitfall is insisting on keeping the house. Sometimes couples are better off liquidating the property to fund individual homes or apartments. This is due to the upkeep cost of keeping a home. This is a factor that is not necessarily involved with other retirement savings like a Roth IRA, traditional IRA or a 401k plan.

Individuals may also make the mistake of withdrawing money from restricted retirement accounts or rolling funds directly into a 401k without looking into tax penalties and other orders that may be costly. Finally, some individuals who chose to pull money out of a retirement account decide to take too much just to make up an early withdrawal penalty and then end up missing out on potential gains that would occur by leaving the investments.

Due to these serious financial concerns, it is especially important for these Massachusetts families to take the proper steps to plan for property division after divorce. One primary step will involve understanding the divorce process and the methods and steps involved in property division. Each situation may pose special circumstances so it may be especially important for couples or individuals to discuss the matter with a legal professional.

Source: Huffington Post, "4 Divorce Mistakes That Can Derail Retirement," Marilyn Timbers, Aug. 27, 2013