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June 15, 2018 at 12:17 PM
Splitting the assets in a defined benefit plan also results in loss of wealth for a spouse who would have received more money had the marriage stayed intact until the earner’s retirement,. (Photo: Fotolia)
Divorce is a messy, costly business—and it can damage both spouses financially for far longer than the immediate period surrounding their split from one another.
Such is among the findings of a brief from the Center for Retirement Research at Boston College, which also highlights how broad the problem can be—with approximately 40 percent of marriages ending in divorce. Although the rate is no longer on the increase, that’s still a huge chunk of the population to face the financial woes that come along with the emotional ones.
Among the financial costs involved in divorce are legal fees, the need to dispose of illiquid assets and the hefty costs of maintaining two households rather than one. But those aren’t the only costs involved.
The report points out that having to sell illiquid assets at a bad time also means that the price gotten for those assets can be less than the assets are worth—not to mention the fees involved in the transaction itself.
Splitting the assets in a defined benefit plan also results in loss of wealth for a spouse who would have received more money had the marriage stayed intact until the earner’s retirement, when “earnings and accruals are at their peak.”
