Retirement and the ‘Gray Divorce’

Retirement and the ‘Gray Divorce’

gray-divorceWhen your divorce occurs is important, especially to your overall financial picture.

Divorcing at an earlier age with fewer assets tends to bring alimony and child support into play.

Divorcing in the prime of your work life can create a large combination of assets – both retirement and non-retirement – as well as income issues that still bring alimony and child support into play.

However, towards the end of your career and moving into retirement, that picture becomes far more complex, and often involves far more retirement assets, less (or no) income, and fewer assets as they are used up in retirement.

It is widely reported that the divorce rate among adults ages 50 and older doubled between 1990 and 2010. Almost a quarter of all divorces in 2010 involved parties in that age bracket.

Though it is tempting to view the termination of a long-time first marriage as no different than any other separation, that view does not align with practitioner experience.

On the one hand, lower asset bases may come into play. Those who divorce at advanced ages may have less wealth than those who remain married, with the gray divorced having only one-fifth of the assets of younger married couples.

Complex issues such as revocation of wills; trusts and medical directives; maximization of retirement assets; division of long-held real estate; and long-term care will also come into play. Life insurance issues take on greater importance because there is an increased likelihood of death before the termination of spousal maintenance.

Do you fit anywhere within this category? If so, are you either contemplating divorce or currently in the divorce process? Make certain your attorney is experienced in the area of divorce for older married couples entering into a new phase of the balance between retirement assets, non-retirement assets, and income, as supplemented often by pensions and social security.

Competence and creativity are the keys to a highly informed “gray divorce.” SIEGELLAW can help. Call us at 410-792-2300 or fill out the form on this page to request additional information.