One 2010 study found that 25% of divorces involve an older couple. That’s backed up by data, which showed that the divorce rate for couples over the age of 50 doubled from 1990 to 2010, while the overall divorce rate remained the same. Divorcing after many years of marriage is a big deal, as there are typically more things to consider—retirement benefits, health concerns, property and social security.
Depending on the divorce decree, retirement money might be given to one spouse or divided. One of the biggest factors determining how retirement benefits are divided up is how each account was set up initially. In some areas, retirement contributions made after marriage are considered marital property, but other times the benefits are considered the property of the contributing spouse.
If one spouse earned significantly more than the other, the lower wage earner could receive either their own monthly social security benefits or half of the higher earner’s benefits if the marriage was over a decade long. Remember that divorcing after 50 could majorly affect your retirement income or even derail your planned retirement.
Estate planning alterations can change from divorce to divorce. In general, most individuals will need to remove the name of their ex-spouse from their will, life insurance policies and powers of attorney.
Health concerns can become more pressing after age 50. Because divorce can leave one party financially unstable, considering how to pay for future and current health concerns should be part of the divorce process. In some cases, a child can offer additional financial support for health issues.
Real Estate Concerns
In general, after divorce household income drops 23% for men and about 46% for women. You should adjust your spending in line with those expectations. One of the best ways to start that process is by selling your home and cutting housing costs. Proceeds from the sale can be used to fund the over 50 catch-up contribution for annual 401(k), 403(b) and IRA retirement plans.
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If you have any questions regarding the financial implications of a divorce you are going through, we are always here to assist you!