Gray divorce has become very common in our society. In fact, one in four divorces today are people over the age of 50. Between 1990 and 2010, the number of divorces for people who were 50 or older doubled, according to a Bowling Green University study.
One lawyer says that half of the divorce cases he handles are gray divorces and for several reasons. The divorce rate for second marriages is even higher.
Retirement funds can really take a hit in a gray divorce. That accumulated nest egg has to be split between two people so each can support one’s own household. When couples with many assets split, it’s much easier, but for the worst cases, there isn’t any money to divorce.
Many who divorce later in life continue to work and put off retirement. They can’t maintain their lifestyle after the divorce and have to cut back on expenses. Health benefits can be lost, too, if a divorced spouse is no longer covered on the other spouse’s insurance plan. It can become so difficult to maintain insurance that some couples choose to live apart, enter into another relationship, but remain married simply for their health care.
A managing director of United Capital says that most of her female clients don’t have as much in their 410(k)s or individual retirement accounts because they only worked part-time while raising their children.
Tax issues can also become a problem when assets are divided, too. Because of all the potential financial pitfalls associated with gray divorce, it’s important to have experienced legal representation. You must make sure you get what you are due out of your marriage.
Source: Colorado Springs Gazette, “Retirement: Gray divorce can drag both parties into the red,” Rodney Brooks, Special to The Washington Post, April 12, 2016
