- Couples over the age of 65 are divorcing at historic rates in so-called gray divorces. Meanwhile, among young people, the stigma that once existed against divorce is waning.
- While there are always legal and logistical issues to consider for divorcing couples, older ex-partners face even more challenges.
- Here’s a look at how a gray divorce can affect your retirement plans, children’s education, and other life changes.
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When we talk about marriage and the “golden age,” that’s the traditional image. They get married, work hard, buy a house, have children, and retire surrounded by their families and grandchildren.
Divorce was a secret topic and an unusual event. But as the world has changed, the definitions of marriage, family, and divorce have all changed as well.
Millennials and Gen Xers view the experience differently than previous generations, and divorce is no longer taboo.
All divorcing couples have legal and logistical issues to consider, but for couples facing divorce later in life, commonly referred to as “gray” divorces, supporting older children , dealing with retirement, restructuring plans for the future, and many more issues. future.
Divorce rate for people over 65 years old reach record highsHere are some questions to ask yourself if you join their ranks.
Gray divorces are often associated with retirees and empty homes, but as the definition of family has changed and couples are marrying later in life, many people continue to maintain families even in their 40s and 50s. is building.
As a result, today’s older divorced couples may have more complex family and financial responsibilities and, as a result, different concerns than couples who married earlier in life.
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A college education poses challenges for those starting families later in life. Unlike the gray divorces of years past, education costs may become a more pressing factor in divorce settlements. To negotiate these terms, make sure you’re on the same page about the content, schedule, and cost of your secondary education.
While many parents consider distance from home, study programs, and how the school will help their child grow, divorced parents need to think even deeper. Is university a 4 year system? Can they study abroad?
For parents who thought they would retire in their late 50s or early 60s, especially in families with multiple children at the time of divorce, their thinking about education funding becomes more cost-oriented, and the target age for retirement becomes later and later.
Divorcing late in life can have financial aftershocks for couples. Unless a clear prenuptial agreement has been established to document asset distribution, you may be wondering how to divide marital assets accumulated over the years and establish new financial standards.
You may need to navigate the complexities of dividing up retirement accounts, pension plans, and other benefits on your own. If you’re funding your university education, combining this with a potential retirement age change may open your eyes to everything you’re dealing with.
Will staying at home or working part-time make enough money to retire? If you’re a stay-at-home mom (or if you work in a non-traditional job, such as freelancing, consulting, or multiple part-time jobs) ), your nest egg may be a concern.
Although you may receive a portion of your spouse’s retirement account, your own retirement account may be less robust than the plan. Even if you plan to return to work, if you’ve been out of the full-time workforce for some time, your starting salary may be lower than you’d like. This, combined with increased budget costs, can limit your ability to grow your retirement account.
Your financial situation can affect your retirement regardless of your marital status, but it’s a particular concern for divorcing couples. Inflation and other economic factors can affect your retirement accounts, savings amounts, and cost of living.
In the case of a gray divorce, this can be especially concerning. Many divorces center around the division of assets, with retirement accounts and homes often being the couple’s largest assets. In a good economy, this can give you extra cash. However, economic instability can make negotiations difficult. Rising inflation, soaring mortgage rates, and a rollercoaster retirement situation can leave people who divorce late in life stressed about how they’ll fund their retirement.
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The government’s retirement age is set at 67, but early retirement withdrawals can start from age 62. However, the court will not necessarily consider him to be retired at age 62. Industries where early retirement is common (police officers, firefighters, construction workers, etc.) — there is an even bigger gap to overcome.
If you or your spouse are part of a pension scheme, this can have a big impact during a divorce.
Some plans are governed by and protected by the Employee Retirement Income Security Act, known as ERISA, while others are not. Also, depending on the type of pension, if it is paid, it may be considered income rather than an asset to be divided, which may affect claims for alimony or child support.
However, receiving government benefits may be helpful. Most spouses do not know that they are eligible to receive Social Security benefits based on their work history as well as their spouse’s.
Is there a large age difference between you and your soon-to-be ex-spouse? Do you have a blended family? Do you still have children at home who are quite apart in age? Gray divorces of the past may not have faced such issues, but they are not uncommon for divorcing couples today. If this describes you, you’re probably not thinking about college or retirement, but about immediate needs and rebuilding your family’s safety net.
If you are the spouse who is not receiving the money, access to immediate cash flow is probably your top priority. If you’re the spouse receiving the money, you’ll wonder how much of your monthly income you’ll share and how quickly you’ll have to collect it in order to pay it all.
As you consider your immediate next steps, try not to get lost in the “now.” Staying focused on your future goals will help you make solid choices now. How close are you to retirement? Are you expecting an inheritance from your family? What assets are available now to increase my future security? What does the divorce process look like for me?
In any divorce, the time and cost of going to court to resolve the divorce is often a concern. If the relationship between you and your soon-to-be ex is amicable, mediation may be a good option.
Mediation allows the parties to discuss the issues and create an agreement that meets everyone’s needs. You will also have more control over the costs and timelines associated with your divorce.
If not, you may be able to reduce costs by involving professionals such as divorce attorneys, trust and estate experts, and financial experts. These can help you see the details of the problem, plan for the long term, and avoid hidden expenses.
— Written by Jamie Berger and Sarah Jacobs, founders of New Jersey-based marriage and family law firm Jacobs Berger