“Grey Divorce” in Season? (Part Two)

gray divorce women finances

In our previous post, we began discussing the implications of divorce involving persons over fifty – “grey divorce.” Here we will continue the discussion by addressing support and health.

Employment with “grey divorce” usually goes one of two ways – one spouse has a long career that still has years of earning power prior to retirement and the other spouse has been underemployed or out of the workforce, or both spouses are nearing retirement and have relatively fixed incomes.

In the first scenario, the lesser-earning spouse will want spousal support, or maintenance. Generally, courts in Missouri see maintenance as a stopgap on the road to self-sufficiency. However, spouses at this age who have been out of the job market will not have great prospects reentering the workforce – they likely face minimum wage. On the other side, the higher-earning spouse has only a fixed number of years left at that wage before retirement, at which point the ability to pay maintenance dwindles. Spouses in this situation will want to consider contractual maintenance that will limit maintenance to a fixed sum for a fixed period of years. Or the higher-earning spouse might want to offer a larger sum of retirement benefits to help the lesser-earning spouse when that spouse will need money the most. Either way, the lesser-earning spouse has to be proactive to assure some level of financial security.

In the second scenario, the ability of one spouse to pay is limited even though the need of the other spouse may be high. In these situations, spouses must look at all available resources and make reasonable plans. What retirement benefits are available? Does one spouse qualify for the other spouse’s Social Security benefits? If some of these assets have a marital component, both spouses have an interest in working out a way that both get enough to have as comfortable a retirement as possible. Downsizing and adjusting lifestyles may be required as well, particularly since it is hard to expect a retiree to earn much in “side” employment.

Even more difficult than support issues are health issues. People pushing retirement face a higher likelihood of some form of health-related disability or chronic illness that limits ability to earn and increases the degree of financial need. While Medicare can cover some of these health costs, it will not cover all. If one spouse has more available funds, the lesser-earning spouse should advocate for that spouse to purchase backup insurance plans – secondary insurance to cover what Medicare will not and long-term care to cover an unexpected and devastating illness.

We cannot stress enough how important it is for “grey divorce” persons to give strong consideration to issues associated with aging. This divorce may be the last opportunity for one spouse to assure the ability to survive in the event of the loss of a job or the onset of a serious illness.

If you have questions about “grey divorce,” contact us – we can help.

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