Once upon a time, it was " 'til death do us part." Now it's "there's no time like the present" when it comes to divorce, especially for those over 50:
- While divorce rates have decreased in most age groups, the rate for those over 50 has doubled since 1990.
- There are many reasons for gray divorce, among them: facing an unfulfilling relationship over a longer life expectancy, the stress of second marriages and blended families that do not work out and women working longer with independent and higher incomes than in the past.
- The social and religious stigma attached to older people divorcing no longer seen as an issue.
Here are seven things to know if you're involved in a gray divorce (or thinking about it):
Gray divorce is typically very expensive, because couples together for 20 to 30 years amass greater wealth and property that must be equitably divided, and because they have no minor children home needing financial support. The greater the wealth, the more complicated and costly the court proceedings and attorneys. Both parties in a gray divorce facing living on less income, since retirement savings may be reduced by legal fees and payments to their ex-partner.
Funds in a 401(K), 457, 403(b), IRA or pension accounts must be divided correctly, or both parties face fines and penalties. An attorney who specializes in the documentation needed for this, called a QDRO, can help you avoid expensive legal issues later.
The kids are all right...maybe: Your grown children and their kids may be fine with the divorce, or they may experience their own collective meltdown, with the younger generations taking sides and worrying about what's now left of "their" inheritance. And less money for the divorcing parties means less money to help them with any plans or expenses they incur.
And if you're a member of the "sandwich generation," will you have the means to help your parents post-divorce? Or will they need to assist you? Will all of you have enough money to last the rest of your lives?
Your health and health insurance both become major financial factors later in life. While you cannot prepare for every eventuality, you need to budget for as many "what ifs" as possible as you age, including home health care, long-term insurance and nursing home care.
Doing what you love, not just what you need matters to your quality of life at every stage. Will you have the means to travel, visit family, socialize with friends and pursue your hobbies after the divorce?
Even in the midst of divorce chaos, it's possible to have calm and rational discussions with both your attorneys and a financial planner. Before you go your separate ways in anger, try divorce mediation first, to work out the dollars and sense details. While both parties will give up and compromise during the process, neither will walk away feeling like the biggest loser.