We’ve mentioned the phenomenon known as “gray divorce” before, the increasing trend among older couples who are calling it quits. The reasons are many and complex: longer lifespans, changing societal attitudes towards divorce and the difficulties of living in an empty nest have all contributed to an era where one in four people getting divorced are over the age of 50. While 25% may not seem like a lot, compare that to 1990 when only one in ten divorces were among those over 50.
While divorce is always difficult and financially costly, it’s especially so amongst older couples. A divorce so late in life doesn’t allow for decades to financially recover. Instead, the split happens right when the couple needs the money most. Assets that took decades to collect are now torn apart as retirement looms in the not so distant future. Given the risks associated with divorce late in life, it’s important to pay attention to some rules to help secure your financial future.
First, re-evaluate your retirement plans. If you initially hoped to travel the world with your spouse that idea may now have lost its appeal. There’s no reason to continue building towards a future you no longer want. Instead, take time to consider what it is you want out of your retirement and whether you can afford your dreams. You may need to be prepared to scale down your hopes to fit your new financial reality, but it’s better to know that early on than be surprised down the road when you’re out of money.
Second, buckle down and get your budget back on track. Though a divorce late in life can be costly, you’ll likely still be receiving some money. For some that means alimony or child support while others may still be working. Your spending habits will need to change given your new single lifestyle and it’s important to adjust your budget accordingly. Pay attention to how much your savings took a hit during the divorce and start rebuilding your nest egg. Consider what you’re willing to give up now to save towards a better retirement later on. Working with a financial planner might also be a good idea if your spouse was the one who was typically in charge of the finances.
Finally, take some time to learn how Social Security benefits work. If you were married more than 10 years and are 62 years or older you can collect benefits from the Social Security system based on your former spouse’s record (assuming this amount is greater than what you would receive on your own). This benefit does not come at a cost to your ex; his or her benefits will not be reduced to accommodate your increase. Another surprise to many is that if your ex spouse dies, you may still be able to receive his or her benefits if your marriage lasted longer than 10 years or you’re 60 or older and you are not entitled to an equal level of benefits on your own. Though the rules can be confusing, the added income from Social Security might make a big difference to providing some security in your golden years.
If you’re older and contemplating divorce, you are welcome to contact our office at (864) 598-9172 to schedule a consultation with one of our experienced South Carolina family law attorneys. We understand how confusing the process can be, and we are here to help secure your future no matter your age.
Source: “Going Through A Gray Divorce? Focus On Your Retirement Savings,” by Suzanna de Baca, published at HuffingtonPost.com.
See Our Related Blog Posts: