“Divorce can be painful emotionally and financially for anyone. But when the split happens later in life, the less time you have to recover from the economic hit. And, far more is at stake.”
There’s an increasing number of older adults who must address this issue. The divorce rate among U.S. adults 50 and older doubled between 1990 and 2010, and about one in four divorces include someone over 50. The data through 2014 found the rates have been about the same in subsequent years.
ABC News’ recent article, “Keeping Some Green in Gray Divorce,” says the reasons for the rise include longer lifespans, more women in the workforce, changing notions about marriage and higher rates of remarriage, which boost your odds of splitting.
Here are some things to consider when divorce suddenly becomes part of your retirement plan. The issues involved in a "gray divorce" are much like those of a divorce at any age, but things like limited working years ahead, complicated assets and adult children may make the process much tougher.
Be sure you have a team of professionals to guide you through the process. This should include an attorney, mediator, financial planner, accountant and a therapist. In a gray divorce, a financial expert is important because you have a lifetime of assets built up. Retirement finances are critical and complex, and you should seek the advice of professionals.
A big issue with an older couple is who gets to keep the family house. You should be receptive to alternatives that will leave you in a better position. Selling a home or choosing other assets in the settlement may give you the income you’ll need in the future. Plus, downsizing can significantly help manage your expenses.
The biggest challenge for individuals going through a gray divorce is making certain that there's enough money to provide a comfortable retirement. Consider and reexamine your options based on the settlement. You might need to delay retirement, return to work, downsize or make other adjustments.
Remember that healthcare can be expensive in retirement. If you’ve been married 10 years or more, you may qualify to receive spousal Social Security benefits.
Make sure you update all the legal agreements and accounts you've set up during the course of your marriage, especially wills, estate plans and beneficiary designations for retirement accounts.
Reference: ABC News (September 7, 2016) “Keeping Some Green in Gray Divorce”