woman contemplating a gray divorce

Considerations for Divorcing When You Are Nearing Retirement

In recent years, the number of people getting divorced later in life has drastically increased. Sometimes referred to as “gray divorce,” these divorces can pose unique challenges to people who are nearing retirement. Here, we will go into more detail about some of the unique considerations you need to take into account when getting divorced as you near retirement.

Considerations for Divorcing When You Are Nearing Retirement

Regardless of the stage of life you are in, divorce can be, among other things, financially difficult. First, there is the fact that two people living in separate households will pay much higher cost of living rates than two people who share the expenses of one household. This alone can have significant financial impacts. There can also be the costs associated with getting a divorce, such as court fees and more, that can add up as well. 

When you near retirement age, these things can have an even bigger impact on your financial well-being. Think about it. Those divorcing at younger ages will have more time to overcome the financial setbacks experienced in a divorce. A steady salary during peak earning years can make a big difference in recovering from the financial impact of divorce. As a person nears retirement, he or she has less time to make up for this. 

In addition to the lower amount of time to recover financially from a divorce, there is also the impact of division of retirement assets in a divorce to consider. In a divorce, retirement accounts, either in full or in part, are likely to be considered marital assets. Sometimes, they are a combination of both if the account was opened and started to be funded prior to marriage and then continue into and throughout the marriage. Your spouse will likely be entitled to a portion of your retirement savings. This division can upend your retirement plans. Compound a division in retirement funds with the fact that a person will have less time to recover expenses resulting from the divorce and also has less time to pay off debt prior to retirement, and you have much less in retirement funds than you may have planned for. Women may feel the effects of this even more as their life expectancy continues to climb upwards and is now into the 80s. Because of the higher life expectancy, women will have to make retirement savings last even longer.

To help protect yourself financially prior to divorce, be sure to get a solid understanding of your finances and that of your spouse. Take an inventory of your marital and separate assets. Be familiar with how much there is in investment accounts, liquid assets such as cash, and the value of assets. It can also be a good idea to evaluate what assets may turn out to be more liabilities than anything. Unfortunately, many people discover this about the marital home, which can be a black hole in terms of the financial resources it takes to upkeep.

Orlando Family Law Attorneys

You can weather the financial impacts of divorce as you near retirement age. Getting trusted legal representation can be critical in doing so. The team at Bernal-Mora & Nickolaou is here to help set you up for a successful post-divorce life. Contact us today.