|
The overall divorce rate in America has leveled out in
recent years, and now hovers around 50
 percent of first
marriages. One demographic has seen a sharp uptick in
divorces, though -- parties over the age of 50 now file for
divorce more than twice as often as they did just 20 years
ago. Longer life expectancy, children waiting later to
"leave the nest," dual-income households and the baby boomer
"can do" attitude are all contributing to the increase in
so-called "gray divorce" in recent years.
How is "Gray Divorce" Different?
For couples in their twenties who are just starting out in
their careers, have only been married a short while, have no
children and haven't yet purchased a marital home, divorce
is fairly straightforward: split the assets, award one party
alimony (if appropriate), wait the allotted amount of time,
finalize the paperwork and then walk away to start a new
life. However, this is definitely not the case if the couple
has been married for 30 or 40 years, have children, own real
estate together and have built their entire lives around one
another.
One of the most important financial considerations in
late-life divorce -- one that might be inconsequential to a
younger couple -- is the division of retirement or pension
benefits. This is of vital importance when one spouse has
been a homemaker throughout the marriage; someone who hasn't
worked outside the home might not have any personal income
to speak of, so a plan must be made to ensure that person is
taken care of financially after the marriage ends.
Is It Possible to Live Off Half Your Retirement?
That is a question that anyone considering a divorce later
in life needs to ask herself: is living off only one-half of
the amount you saved for your golden years financially
feasible? If a couple is well-off financially during the
marriage, it is likely that they will not see a drastic
change in their standard of living even if they are forced
to split retirement assets.
In this tough economy, though, more and more couples are
scraping just to get by during their working years. Those
same couples are saving less for retirement because they
need the money for current expenses. This means not only
that many people are working later in life, but also that
their retirement cushion is much smaller. For couples in
that type of financial situation, it may be nearly
impossible for them to financially sustain two separate
households, thus making it even more important that their
divorce be handled with care and precision.
How Will a Divorce Affect Social Security and Other
Benefits?
Depending on a couple's financial situation, a late-life
divorce may or may not impact the parties' receipt of
government benefits like Social Security payments and
Medicare coverage or funded retirement plan income like that
coming from an IRA, 401(K) or pension program. If the couple
was married for more than 10 years, they will likely be
eligible to seek support from each other's Social Security
benefits. This is particularly important in situations where
the parties had a disparity in income while married; the
difference in benefit amounts could be substantial enough to
allow one spouse to live independently when she otherwise
might not have been able to afford to support her own
household.
Get the Help You Need
Whether you are young or old, if you are divorcing, you need
a skilled family law attorney at your side to increase your
chances of a successful outcome. Enlisting the help of a
certified financial planner could also be instrumental in
protecting your financial best interests.
About the Author
Article provided by Jonathan D. Katz. Visit us at
www.jonathankatzlaw.com.
|
