The largest generation of Americans, the Baby Boomers, are retiring and divorcing at unprecedented rates. A study by the Bowling Green University found that 25 percent of American couples over the age of 50 are divorcing. It also found that the divorce rate, since 1990, has doubled. This reflects the steady and growing trend among older couples of greater independence from their families and partners. In fact, these divorces are so becoming so common that they earned their own moniker "gray divorce." This article will go over the legal and financial impact that divorce this late in life can have on a couple.
When a couple divorces most assets need to be divided. This includes tangible things like houses, beds and pets but it also includes businesses, 401(k)s, IRAs, and pensions. Even if one of the spouses did not work, he or she is may be entitled to one-half of the retirement accounts. This significantly impacts their ability to maintain their lifestyle. Many retired couples end up losing their retirement after divorcing because their retirement savings is then used to support two households ? rather than one. Another issue is alimony, the working spouse may be required to continue employment well into their 70s to pay spousal support.
Moreover, there are healthcare issues to consider. If a couple divorces before Medicare benefits activate, then the non-working spouse could be left without health insurance. Due to this, many couples are choosing to stay legally married for healthcare benefits while living apart or with other
Divorce is never an easy decision. Especially after so many years together, the change is jarring. If you are considering divorce then you might want to talk to a lawyer first. As illustrated above, there are a myriad of legal and financial issues to consider before you make that decision. An attorney can review your case and help explain your options to you. Divorce is already emotionally draining, don't let it also be financially draining.
Source: The Washington Post, "Gray divorce can drag both parties into the red," Rodney Brookes, Apr. 9, 2016