Divorce and Retirement

Posted by Josh Valentine | Oct 02, 2019

According to one survey, women who get married for the first time when they are aged 15 to 20 are more likely to be divorced. People who get married between ages 28 and 32 are more likely to be married for longer. However, people can get divorced at any age and it does not make the process any easier. Couples who end up getting divorced around the time of retirement may even face additional challenges. 

Divorce and Retirement in North Carolina

Divorce can be costly. Divorce around the time of retirement can also affect your ability to retire securely as it can greatly impact your retirement savings. According to one study, women are disproportionately affected after a divorce with a greater decline in standard of living. Women average a 45% decline in standard of living after a divorce, compared to 21% for men. 

Alimony payments are often limited based on time and other events. For example, spousal support may continue for a number of years but not extend into post-retirement age. Additionally, alimony is often tied to staying unmarried and marriage will end support payments. 

One of the issues in a divorce is dividing assets. Under North Carolina law, property division is based on “equitable distribution.” However, equitable is not necessarily the same as equal. One spouse may keep a major asset like the family home in exchange for an equivalent amount of money. However, financial assets like savings or retirement accounts are generally more liquid than property assets. This can be a problem in later years when a large house is not necessary and requires ongoing investments to maintain the property. 

Stay-at-home moms who are raising children instead of working can also miss out on Social Security benefits if they were not married long enough to qualify for Social Security benefits. Generally, a spouse who did not work enough to qualify for Social Security needs to stay married for 10 years or more to qualify for half of the working spouse's benefits. 

Retirement Savings and Divorce

Many people contribute to their retirement savings both before and during marriage. Contributions can include both individual and marital assets. The different sources of retirement savings can be further muddled when combining retirement accounts or rolling over retirement plans, including IRAs and 401(k)s. At the time of divorce, it may be difficult to determine how much retirement savings were funded by separate assets or marital assets. 

Small Business Owners and Divorce

Divorce can be very complicated for small business owners with so much of their personal wealth tied up in the business. Even if the business is primarily run by only one spouse, the value of the company may be considered marital property. Many small business owners have the business as their primary source of retirement savings. Suddenly losing half of the value of the business in a divorce can be a major blow to retirement plans for business owners. 

Prenuptial Agreements in Divorce

Prenuptial agreements can provide a way for an individual to maintain separate retirement savings after a divorce. However, most couples do not consider making prenuptial agreements in anticipation of separation or divorce. In some cases, a post-nuptial agreement can also deal with retirement savings. Talk to your North Carolina divorce law attorney about how you can plan for a divorce or separation while protecting your retirement savings.   

Divorce Lawyers in Shelby   

At Caulder & Valentine Law Firm, PLLC, we have helped our clients handle complex divorces, including dividing business assets and retirement savings. If you have any questions about divorce in North Carolina, contact us today for a consultation.

About the Author

Josh Valentine

You could say Josh has a God-given ability for sustaining long-term relationships. He and his wife first met in elementary school and went to Gardner Webb University (GWU) together, where they tied for number 1 in their class. Then, they both started law school on the same day of their graduation and got married during their first semester. He has also known his law partner Blake Caulder since Kindergarten. Theirs is the perfect partnership. “He’s the brake; I am the accelerator,” Josh says. Both Josh and his wife attended an innovative program at Charlotte Law School that allowed them to complete law school in two years instead of the typical three. His wife graduated and passed the North Carolina bar at age 20, becoming one of the youngest attorneys in the state. He readily admits she’s smarter than him. Of course, Josh went on to pass the North Carolina State Bar himself and later the South Carolina State Bar. While in school, he was Associate Editor of the Law Review and received accolades like Phi Delta Phi International Legal Honor Society membership, Order of the Crown, Pro Bono Honors, CALI Awards (highest grade). In his career as a lawyer, he has been admitted to the United States Federal Court for the Western District of North Carolina, is a member of the American Association of Premier DUI Attorneys, and completed training for DWI Detection & Standardized Field Sobriety Testing. Josh has also been named to the Top 40 Under 40 for Criminal Defense by The National Trial Lawyers, the Business North Carolina 2019 Legal Elite for Criminal Defense, and the 10 Best Attorneys for Client Satisfaction by the American Institute of Criminal Law Attorneys three years in a row (2016, 2017, and 2018). Community involvement has been important to Josh all his life. In high school, he participated in building a Holocaust museum that has become internationally regarded. He and his wife are actively engaged in animal rescue, which currently means seven cats and two kittens. He served in prison ministry and assisted with fundraiser banquets there, and he provides pro bono and reduced fee legal services to those in need. As if all of that weren’t enough, Josh also mentors high risk youth and helps with his church’s youth group. He participates in other community volunteer projects involving construction, remodeling, drywall, painting, and landscaping. He’s an active student of the Bible and has traveled to Israel, Brazil, and Europe for mission work. No one can say Josh isn’t a well-rounded individual. In his spare time, he likes to play softball, basketball, and tennis, and he can play the piano and trombone. Sometimes on weekends, believe it or not, he enjoys pouring and finishing concrete with friends who own a concrete and grading business. In his law practice, Josh has made it a point to develop positive relationships with officers, clerks, and district attorneys, which has proven invaluable in delivering positive results for his clients. It’s important to him to both listen to his clients and fight for them. Law enforcement officers have important responsibilities to keep our communities safe and uphold the law, but one of the responsibilities of attorneys is to make sure officers do their job correctly. Josh considers it his job to hold them accountable for their actions. Josh is a person of deep faith. He knows that the established order of our universe and strength of America’s Judeo-Christian influenced court system is built on God’s word. His passion to serve each client with innovation, excellence and integrity is a byproduct of his faith. When asked why he became a lawyer, Josh says, “All through my life, I have personally witnessed family members and very close friends endure divorce, child custody battles, bankruptcy, civil lawsuits, and even fraudulent criminal accusations. I both saw and experienced the stress such events can place on an individual, and I realized that everyone, at some point in their life, needs hope, comfort, and encouragement. In each one of those situations, the person who was best situated to provide that vital support was their lawyer. So that’s why I became an attorney. I understand what you are going through, and I’m here to help you. Our office is focused on meeting your needs and guiding you through what may be the most difficult time of your life.” Education: Charlotte School of Law J.D., Magna Cum Laude Class Rank – 21 of 328 Associate Editor of Charlotte School of Law Law Review Certification and Concentration in Employment Law Phi Delta Phi International Legal Honor Society Order of the Crown Pro Bono Honors CALI Awards (Highest Grade)—Lawyering Process I and Contracts I Full Scholarship Gardner-Webb University B.S. in Accounting, Summa Cum Laude Distinguished Senior Student Award – Highest GPA Alpha Sigma Lambda National Honorary Society Bar Admissions: North Carolina State Bar