One in four divorcing couples features an adult over 50. Getting a so-called gray divorce poses some additional challenges for couples, who risk losing valuable income they need for retirement.
Middle age and older individuals face unique challenges during divorce. It is beneficial to understand how these issues may affect your future and what you can do to get the most out of your divorce. Learn more about how to protect your financial wellbeing by considering the tips below.
Talk your case over with a financial adviser
You know you need a divorce lawyer, but have you thought about talking to a financial adviser? A financial adviser can help you account for all marital assets, obtain objective information from your spouse, and formulate a financial plan. This is not the time to be over generous or make a mistake because emotions are running high. Retain a financial adviser before things turn ugly.
Calculate your retirement needs
Studies have shown that older adults who divorce are less likely to recoup financial worth lost during the divorce than younger adults. This may be due to the fact that older adults have fewer working years left in which to earn. Older adults may also have increased medical expenses or face requests for support from grandchildren or adult children.
To avoid taking a financial hit as a result of gray divorce, calculate your needs in retirement and take stock of your assets. If you have to work part-time or downsize your home to curb expenses, then do it. If your marriage lasted more than 10 years, then you are entitled to withdraw from your ex's social security - and you don't even need to let them know you're doing so.
Consider health care needs
Health care costs rise for older adults, who are more likely to need higher levels of care. If you don't think about your health care costs during the divorce, you could wind up spending a significant portion of your income on health insurance.
If you are under 65, you cannot yet receive Medicare. Yet once you get divorced, you cannot remain on a spouse's health insurance. A thorough divorce plan should include consideration of how to pay for health insurance. Your attorney may suggest that you seek spousal support payment from your ex that covers all or part of your health insurance costs.
These are just a few of the aspects of divorce that differ for the 50-plus crowd. If you decide to get divorced, retain an attorney early in the process to get expert advice tailored to your situation.