Gray Divorce And Retirement

Divorce after 50

As this article in Barron’s indicates, Americans over age 50 have the fastest growth rate in divorce over the last thirty years. While multiple factors contribute to this rise, the most significant is the fact that people in this demographic likely have been married before.

Getting a divorce at this age has consequences that differ for younger individuals. Members of the “gray” divorce group are much closer to retirement and have an increased likelihood of illness or disability. Living on what could be a fixed income means that life after a “gray” divorce will look much different than during the marriage – income will be halved, but expenses will remain, and the availability of certain retirement funds may be diminished.

If you are going through a gray divorce, begin by working up a simple cash flow inventory – what are your fixed expenses, what are your expected income streams, and what is the gap. If you find your income will not cover expenses, you must see if you can shave expenses (downsize) or increase your employment. While maintenance might be an option, it becomes more problematic if the marriage has been shorter and the other spouse may have limited income ability as well.

After you have a good idea of your basic cash flow, you can discuss with your attorney your options to protect as many of your assets as possible and to work toward a creative division of marital property that best serves your needs long-term.

Other factors to consider: whether your Social Security benefits may be larger using the income of your soon-to-be former spouse (it will require you have been married at least ten years); how to amend your estate plan to assure that your spouse is removed and that your children or other heirs will be protected.

Finally, consider the costs of health insurance and long-term care. If you have been under a policy of long-term care with your spouse, see if you can continue that coverage. If you qualify for Medicare, you will want to consider supplement policies. And if you cannot afford these protections, you might want to have these provided for in your divorce settlement agreement.

Gray divorce carries its own unique facets that can be highly consequential. Be proactive!

If you have questions about gray divorce, contact us – we can help.