Data from the U.S. Census Bureau reveals that the portion of the population that sees the highest divorce rate is the one containing those between the ages of 55 and 64. Gray divorces are more common today than ever before, with the divorces of famous individuals like Bill Gates and Jeff Bezons highlighting this.
They also tend to carry greater financial risk since older people are usually on the brink of retiring and may not have a way to recoup diminished funds in the short period before retirement. As a result, older couples considering divorce may be wary and have questions.
1. Does divorce impact retirement savings?
Whether IRAs, 401(k)s, pensions and other retirement accounts face division depends on the timing of contributions to them. Texas is a community property state, meaning assets acquired during marriage fall under the shared umbrella and are subject to distribution. Money invested before the union is separate property and not, but any put in during it is divisible. Accounts may consist of a mix of both community and separate property.
2. Does divorce impact Social Security benefits?
For marriages that lasted at least ten years, an individual divorced for a minimum of two years who does not qualify for Social Security benefits and is at least 62 years old may be able to receive them through a qualifying ex-spouse. This does not affect the amount received by the qualifying person.
3. Does divorce impact a mortgage?
If a married couple purchases a house after nuptials, it is community property even if only one party’s name is on the deed and mortgage. It is subject to division.
Gray divorce does not mean the loss of everything. There are solutions to avoid breaking up assets that may arise through negotiation.