How is Retirement Affected By Divorce?
Nowadays, more and more people are waiting until they are older to end their marriages. According to the Pew Research Center, the divorce rate has approximately doubled since 1990 for people over the age of 50. While divorcing later in life has its advantages, there are also additional concerns for older divorcing couples to consider.
One major divorce issue for older couples in Washington is financial stability. Many people over the age of 50 are retired and should be aware that divorce can impact their Social Security benefits, IRAs, 401(k)s, and various assets, including houses.
As a gray divorcee, you may be able to receive Social Security benefits based on your former spouse’s work history if you were married for 10 years or more. You must also currently be unmarried, and your ex-spouse must be over the age of 62 and eligible for benefits. If you meet these criteria, you can recover 50% of your ex’s primary insurance amount.
If you have an IRA or 401(k), these accounts can be divided between you and your soon-to-be ex-spouse under a qualified domestic relations order. You can also split up your pension with some additional paperwork. Once these accounts are split, you will need to make sure you change the beneficiary designations.
Finally, you and your spouse will have to decide what to do with your family home. In many cases, one spouse will stay in the house and pay the other spouse for their share of the house. However, the spouse staying in the house may struggle financially if they take on a new mortgage solely in their name, especially if they are retired. That’s why selling the house and splitting the proceeds with your ex or agreeing to a reverse mortgage may be options to consider.
Retired couples considering divorce may face complications that younger couples do not have to worry about. A divorce attorney can help you handle these complications and help you stay financially stable post-divorce.