As people tend to live longer, society sees an increase in other trends. Despite vowing to remain married until “death do us part,” many older couples decide to divorce. This wave of gray divorces is related to the baby boomer generation seeing drastic changes in their relationship as they reach retirement age. While divorce can be complex at any age, the major issue associated with a gray divorce is financial security, as it could threaten their retirement accounts.
The economic hardships experienced by a gray divorce can be even more devastating than a divorcing spouse that has been out of the workforce to be a stay-at-home parent. This is why it is important to be aware of the following 10 factors when initiating a gray divorce.
To begin, a gray divorce could lead to poverty, as these individuals are no longer working and had planned to participate in their retirement together. A study found that baby boomers are five times more likely to live in poverty when they are divorced when compared to those that are married. Second, it is more costly to live retirement years apart than together. A study found that it can be 30 to 50 times more expensive. Next, a gray divorce means coming to a new retirement reality and stretching the amount saved because it is now cut in half.
There are many considerations to factor in when going through a gray divorce. This can include changes to Social Security, tax implications, insurance considerations and the financial fine print, such as named beneficiaries and names listed in wills, medical forms and other documents. Three final factors involved in a gray divorce includes surprise debt that can come up in the divorce process, determining how to handle the family home and how best to tell adult children.
Divorce can have its complications no matter the ages of the spouses or the length of the marriage. Thus, it is important to understand everything that should be considered throughout the process and how best to protect your rights and interests along the way.