Archive for retirement

CNBC: Divorce After 50 Can Be Pretty Hard

It seems that the grey divorce is on the rise. According to a post on, 1 in every 4 divorces is from a couple over 50. I find that amazing.

portrait of mature aged attractive senior womanDivorcing moments before retirement can be a dangerous proposition. I have seem many of my over-50 clients finding themselves in serious trouble. They often don’t realize that the community property portion of the retirement is cut in half in California. Nearly 100% of my clients lose money in the divorce. Dividing assets and no longer pooling resources can make for some serious budgetary heartburn. Younger couples can bounce back pretty well, but I often worry for the older couple. There just isn’t enough time to rebuild the nest egg. If one spouse stayed home to take care of kids and never reentered the workforce, there simply isn’t enough time to rebuild new job skills and earn sufficiently to save for retirement in such a short time. Support payers are often faced with the prospect of alimony payments for the rest of their lives.

This article on by Ilana Polyak does a good job of laying it out:

Let me know what you think? What thoughts or ideas do you have for older couples facing a divorce?

The National Law Review: IRA Rollover trap in divorce cases

The National Law Review: IRA Rollover trap in divorce cases. What do you think?

Can I keep my share of Social Security from my ex? – The Help Desk – Personal Finance FAQs – CNNMoney

I am frequently asked this question.  In California we never deal with Social Security in the Marital Settlement Agreement because the concept is pretty much understood under Federal Law.  If you have been married for at least ten years, your spouse will get derivative benefits.  Period.  They can do the math and decide whether the derivative benefits are better for them or not, but they get the choice.  Not you.

But have no fear, derivative benefits have no effect on your own benefits, so quit worrying about it anyway and spend your energy on golfing once you retire. 😉

Here is the CNN Personal Finance Help Desk article on the subject.

Can I keep my share of Social Security from my ex? – The Help Desk – Personal Finance FAQs – CNNMoney.

Making sense of California’s Time Rule to Divide Pensions.

By Shawn Weber, San Diego Divorce Attorney

When dividing the community property interest in a defined benefit plan, the Court most often uses the so-called “Time Rule” or “Brown Formula”. Many clients (and a lot more attorneys than you would think) have a difficult time understanding how the time rule formula works.

Basically, the court uses a formula for the apportionment between divorcing spouses of the future retirement benefits. A percentage is determined based on the ratio between the time that a member spouse was enrolled in a defined benefit plan during the marriage and the total time that the person was enrolled in the plan. The formula is used because often times the member spouse is not yet retired and is still racking up separate property time in the plan, changing the percentage of the total benefit payment the non-member spouse would receive when the plan goes into pay status. For an excellent discussion of the Court’s use of the time rule, see In re Marriage of Judd (1977) 68 Cal.App.3d 515, 137 Cal.Rptr. 318.

In applying the formula to a pension annuity, the Court in Judd “simply” boiled the time rule down as follows:

“The most effective method of [dividing the community property portion of a pension] would be to determine the community interest to be that fraction of retirement assets, the numerator of which represents the length of service during the marriage but before the separation, and the denominator of which represents the total length of service by the employee-spouse. Such disposition would comport with what we have termed the ‘time rule.'”

For me, it is easier to actually see the formula written out as follows:

1/2 x (Member’s system credit accumulated from date of marriage / members total system service credit at time benefits become payable) x (Member’s benefit at time benefits become payable) = (Non-member spouse’s share of system benefits)

Usually, a Qualified Domestic Relations Order or “QDRO” will be required by the pension administrator to apply the time rule to the pension. Then, once the pension goes into pay status, the payments will be divided according to the formula.

time rule, pension, retirement, dividing retirement, community property, QDRO, domestic relations order, san diego divorce attorney