If you are going through a divorce after decades of marriage, after 50, you aren’t alone. In fact, the number of couples divorcing after 50 has nearly doubled since the 1990s in the United States. Baby boomers and now older Gen Xers fueling this rise in gray divorces face unique challenges in a gray divorce though – especially when it comes to retirement.
Splitting retirement assets
Other than splitting assets from the marital home, the largest assets many couples divorcing after 50 own are their retirement accounts. Because Colorado is an equitable division state, couples must split their assets in a fair, equitable manner. That means you may not split your retirement accounts 50-50 with your spouse. If your spouse spent a decade out of the workforce to raise your children, your spouse may get more than 50% of your retirement earnings.
Health insurance costs
One thing older couples who divorce often overlook is how expensive health insurance is, especially if you have had coverage under your spouse’s work plan. If you’re self-employed, paying for health insurance after 50 can equal hundreds, if not thousands, of dollars a month. That’s something you need to keep in mind as you split your assets and may force you to delay your retirement.
Social Security earnings
If you’ve been married more than 10 years, you are eligible to receive half your spouse’s Social Security earnings once they qualify for them. Even if your spouse remarries, you still can receive these benefits. However, if you remarry, you can lose these Social Security payments.
Keeping the house
You may have an emotional attachment to your longtime family home. However, fighting to keep that asset in your divorce may not be worth it. You shouldn’t overlook the fact that you may need to refinance it to buy out your spouse and you’ll have to pay for maintenance and improvement costs on your own. You could take this opportunity to downsize and pocket some equity you earned into your retirement funds.
If you go through a divorce after 50, it can leave you struggling with your finances. You may need to delay your retirement – to give yourself more time to pad your savings and to keep your employer-subsidized health plan.
When you are facing divorce after 50, it’s best to work closely with your attorney to address some of these challenges. You want to prepare the best you can for your new start.