The Shades of Gray Divorce

woman on square's bench with dog
Jan 22, 2020 | Sara Khaki

And Why They’re Important to Consider

The divorce rate for couples over 50 has nearly doubled in the last decade. Divorces that occur later in life, sometimes called “gray divorces,” happen for many of the same reasons as any other divorce: financial pressures, infidelity, or a desire for independence. Whatever the reason, older couples often face unique, age-related challenges concerning their finances and dependency upon one another that can factor into the proceedings.

Dividing retirement plans can be complicated and is often done through a separate court order called a qualified domestic relations order. You’ll also need to consider whether you can receive survivor benefits after the divorce in the event that your ex-spouse dies, if any loans taken against a 401(k) should be repaid, whether you’re entitled to any contributions made to your combined retirement plans, and whether you can receive distributions and still avoid tax penalties. There are many nuances to wade through when it comes to divvying up retirement assets.

Social Security benefits can’t be divided by a divorce court like retirement assets can, but benefits are greatly dependent upon your income after divorce and should be monitored carefully. If you’ve been out of the workforce during your marriage, have been married for 10 years or more, and are 62 or older, you can still collect retirement benefits on your former spouse’s Social Security without reducing their benefits. You can also switch from their benefits to your own if you prefer.

While retirement and Social Security are important considerations in a gray divorce, the largest change will most likely be to your day-to-day life. You may be expected to live on less than anticipated, work longer than expected, or even re-enter the workforce. Whatever direction you find your life now taking, plan your approach effectively by calculating your living expenses, generating income, mixing up your portfolio, and understanding the value of your time and your aspirations. And don’t forget the importance of having a lawyer assist you through this new phase of your life.


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