The Financial Aspects Of Baby Boomer Divorce


The age of a couple when they divorce has a great impact on the financial stakes. Younger couples likely have not accrued significant wealth and have many years of work ahead. Older couples – individuals in their late fifties or older – have more to lose in two key ways: they likely have more assets, but they also have very few years of productive work.

Baby boomers get divorced at a very high rate, and if you fall into this category, you should think carefully about how you pursue the divorce and protect your interests.

In most baby boomer marriages, both spouses are not equally employed; in fact, one spouse may not be employed at all, having foregone work to raise the children. With the higher earning spouse approaching retirement age, maintenance may not make sense financially because of a looming fixed income. Also, expecting an older spouse to find suitable work so long out of the job market also becomes a challenge. If the couple has had a nice lifestyle during the marriage, maintaining that lifestyle after divorce will simply be unsustainable unless they have significant savings.

Most baby boomers will find themselves drawing on Social Security and work-related retirement benefits or personal savings. Even if a couple saved collectively one million dollars, splitting it in half means each has to figure out how to live on half a million dollars for twenty to forty years. The math becomes very daunting, even if one has long-term care policies. One simply cannot live comfortably on $30,000 per year. That is one reason we see many baby boomers – and older adults – working at lower wage jobs with greater frequency.

Given these rather harsh financial realities, baby boomer couples should try to avoid an expensive divorce as it drains needed retirement resources. Also, the lesser earning spouse has to consider whether to trade maintenance for a larger share of retirement benefits, particularly given Missouri law that will expect that spouse to still pursue gainful employment. If the couple has one home, all or nearly all paid off, selling the house so that each may find smaller affordable housing is a critical consideration.   What other valuable assets does the couple possess?

Baby boomers seem to divorce at a higher rate because with a longer life expectancy they want to start anew with a different partner. But that level of desire clearly has a price – a diminished quality of life and the responsibility of working much longer than expected and supporting your former spouse much longer than anticipated.

Health issues also become very important – if one spouse cannot afford long-term care insurance or other necessary policies, the other spouse should be required to cover these expenses. Medicare alone will not suffice.

We cannot answer all questions related to boomer divorce in one post. But we hopefully have highlighted some of the significant concerns each party should consider during the process.

If you have questions about baby boomers and divorce, contact us – we can help.


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