On behalf of Cobert, Haber & Haber Attorneys at Law posted in Divorce on Saturday, March 5, 2016.
As we discussed in our previous post, the number of older people deciding to end their marriages is increasing. Indeed, if you still have a hard time believing this consider that a separate study by researchers at Bowling Green State University found that while the overall divorce rate remained relatively static from 1990 to 2010, it actually doubled among couples over the age of 50 during this same timeframe.
While it’s true that pursuing a divorce later in life can prove to be an incredibly liberating and altogether necessary endeavor, it’s important for those who are either on the cusp of pursuing or are currently in the early stages of a so-called “gray divorce” to keep a few important financial factors in mind.
For starters, older people should be aware that like their younger counterparts, they will see their financial situation change in the wake of a divorce. For instance, thanks to a single-income reality, living expenses will become higher and, perhaps more significantly, retirement savings will likely take a hit.
While this information is probably disconcerting, the good news for older people in these scenarios is that there are steps they can take to offset the potential loss of retirement savings.
For example, one step experts recommend people should consider taking is selling the marital home.
While the urge to hang onto the place where you have lived for many years or even raised a family is likely very strong, experts indicate that a decision to sell can actually generate major retirement gains.
To illustrate, consider a divorced spouse who reduces their housing costs by $500 by selling the former marital home and moving to smaller quarters. Here, if the divorced spouse is able to secure just a 5 percent return on these savings over the next ten years, this could translate into as much as $77,000 in additional retirement savings. Â
What all of this serves to underscore is that divorce — at any age — is a complex undertaking. As such, those with questions or concerns about any aspect of the process should serious consideration to meeting with an experienced legal professional.
