You may have heard by now about the rise in so-called gray divorce, a term referring to divorce between couples over the age of 50.
There are many reasons why gray divorce is becoming more frequent. Spouses grow apart or may find that after the children are grown and leave the house, they have nothing in common.
Sometimes one or both spouses realize that they want to make the most of the remaining years of their lives and recognize that they do not want to spend those years together.
Additionally, there could be an increase in divorce after the pandemic. The stress of the socially isolating pandemic years, where married couples were forced to spend time together, has resulted in many couples examining the state of their marriages.
Moving forward with your gray divorce
If this sounds like your situation, you might be heading for a gray divorce. However, perhaps you are putting it off because you are afraid of losing your financial stability.
This is understandable. After many years of marriage, most couples have accumulated several assets and a great deal of wealth.
You may not be opposed to splitting these assets with your spouse as part of divorce, but the thought of spending your remaining years worrying about money is not exactly appealing.
If you know gray divorce is the right choice, there are some steps you can take now to protect your finances to avoid a bleak post-divorce financial future.
Examine your employment situation. Determine if you have enough money to support yourself on your own. If not, think about steps you can take to increase your income or start learning about your chances of receiving some spousal support or alimony.
Review your retirement plans. It may help to talk with a financial advisor about the status of any plans and their expected growth in the future.
Have a realistic attitude about what you may have to give up
You most likely have a marital residence, maybe one you have lived in for quite some time. Recognize that unless you know you can afford to pay for the residence on your own, it might need to be sold or given to your spouse.
Even if your children are adults, there are likely to be times when you must help them out financially. Consider any major future events for your children, such as weddings, or educational goals, and keep this in mind as you go through the divorce process.
Once the divorce begins, you and your spouse will both need to prepare financial statements. This is a list of all marital assets and debts that will be spit in the divorce.
As part of this preparation, develop a budget and financial plan for both during and after the divorce. Be realistic. It is generally better to overestimate costs rather than underestimate, to account for any unexpected events.
Factors unique to gray divorces
There are some factors that are more prevalent in gray divorces. Older couples are more likely to have life insurance policies with each other’s names as a beneficiary.
Social Security is another common concern in gray divorces. Spouses married over 10 years are typically entitled to half of the other spouse’s Social Security if certain conditions are met.
Taxes are another important factor that should not be overlooked. Many financial decisions in divorce have tax implications.
Starting early, careful planning and securing the advice of professionals can help you come out of your gray divorce financially intact.