Perhaps unfamiliar to many, “gray divorce” is a common term for divorce after the age of 50. Divorce is much more common with younger couples, but trends have changed in recent years. Divorce remains more frequent for those under 50, but the gray divorce rate has doubled since 1990.
These figures were released in a study by Pew Research Center earlier this year. It identifies that the after-50 rates remain about half that of the pre-50 age group. The divorce lawyers at the Law Office of Jim Jarvis have decades of experience with gray divorce. (We’re a little on the gray side, ourselves.)
Older divorce has different concerns
At a later stage of life, divorce will be different. The children are usually grown at this point, and instead of establishing a family and an estate, the spouses are planning for retirement and post-work life. Many would think that a divorce without child custody is easier, but gray divorce is equally challenging because of how some retirement plans work.
Whether dividing a 401(k), pension, military retirement, investments or a jointly owned business, there are unique rules about income distribution, taxes and fees from retirement accounts. If a couple is in their 50s, there are still working years where the expectation was to grow the nest egg together. Splitting accounts and dissolving the marriage changes the investment ratio, which may result in more working years before retirement. If a couple is closer to retirement, the scheduled distribution becomes a challenge: making sure that each partner has adequate resources while paying for separate living conditions.
Likewise, it’s important to keep in mind that concerns such as Social Security and Medicare benefits are not marital property. That does not mean they are not relevant, especially where the spouses have significantly different benefits. Less experienced attorneys may overlook this fact.
Protecting financial security through the change
There are many theories about the growing rates of gray divorce. One is that the Baby Boomer generation divorced more frequently early in life and gray divorce, in many respects, is merely a continuation of this trend. Some individuals now emphasize independence more strongly. Other couples who were unhappy long ago waited until their children were fully grown to change their household dynamic.
Whatever the impetus, splitting retirement accounts and planning for independent life later in life requires a strong understanding of finances. While it’s possible to negotiate a divorce yourself, working with an experienced attorney who understands financial implications can save you frustration and maybe even years in the labor force. When desired, the Jarvis law firm can bring in qualified divorce financial planners into the mix, working alongside the lawyers. Gray divorce is a unique situation that calls for experienced legal and financial advice to protect your independence as you plan for retirement.