Baby Boomers are retiring at increasing rates. These retired couples, unlike any that preceded them, are wealthier and more independent than ever. This is good because they continue to contribute to the economy and for overall improved health. But with independence also comes divorce. Baby Boomer couples are divorcing at unprecedented rates. These divorces are so prevalent that they have earned their own nickname, "gray divorce." Gray divorce has a unique set of legal issues. This article will go over the legal and financial impacts of divorce later in life.
A study by the Bowling Green University found that 25 percent of Americans over 50 are getting divorced. It also found that the rate of divorce for older couples doubled from 1990 to 2010. A number of factors are present including empty nest syndrome. Regardless of the reasons, this is happening and many couples are not prepared for the financial and legal implications.
Divorce can cut assets and incomes in half. Pensions, IRAs, 401(k)s and other retirement accounts all must be divided. Retirement plans originally designed to support one household now are being stretched to support two. Dependent spouses often fight for alimony payments, even though the working spouse may be retiring. All of this amounts to a complicated financial situation for most couples.
There are also healthcare issues to consider. For example, if you divorce before Medicare benefits activate then you may not have health insurance during those gap years. In fact, some couples are choosing to remain together to maintain their health coverage.
If you are considering divorce then you may want to speak to an attorney. Divorce, especially if you are retired or preparing to retire, could dramatically alter your lifestyle. It only gets more complicated the longer you are married. An attorney can help you go over, not just the legal issues, but also help you plan for the future.
Source: The Washington Post, "Gray divorce can drag both parties into the red," Rodney Brookes, Apr. 9, 2016