Over the last few decades, there has been a rise in a phenomenon known as gray divorce. This is not a technical term, but generally refers to people who are getting divorced in the latter half of their lives. For instance, the divorce rate for those who are under 45 has generally been falling, while it has been rising for those over 45 and has tripled for those who are over 65.
But as divorce at this older age becomes more common, what is it going to mean for retirement plans? Many people who are married in their 50s and 60s are planning on retiring together. Is getting divorced just a few years before retirement going to ruin those plans?
Dividing benefits
A divorce at this age can certainly affect retirement, as it will have a financial impact on the couple. They have to go through marital property division and split up their assets. They will also both be individually responsible for many different costs during retirement – such as housing – that they may have initially been planning to share.
One key thing to remember at this time is that retirement benefits often have to go through property division along with other assets. One spouse may be concerned that they are going to lose access to retirement benefits earned by their partner. But if those benefits were earned during the marriage, they can be divided with a qualified domestic relations order and split up so that both people can still use them.
This does complicate the process of getting a divorce, which is why it is important for couples to know exactly what legal options they have.