Ending a marriage is complicated in the best of times. Even dissolving shorter marriages can get messy. But the longer a marriage, the more difficult it becomes. People toss around the term gray divorce a lot these days. Divorcing later in life comes with its own unique set of problems, concerns, and issues to deal with.
What Is Gray Divorce?
Gray divorce refers to spouses over the age of 50 ending a marriage. Overall, the divorce rate continues to decline. In fact, in 2016, it reportedly hit a 40-year low. That said, the divorce rate for couples over 50 has more than doubled over the last 20 years. Roughly one-in-four divorces involves couples over 50, while roughly one-in-ten involves couples over 65.
Why Gray Divorce?
While every couple has their own unique reasons for ending a marriage, there are reasons why gray divorce is on the rise.
- Life Expectancy: One reason is that, with advances in medicine and an increasing focus on healthy lifestyles, people simply live longer. Divorcing at 50 and beyond leaves ample room to live a full, exciting life.
- Societal Changes: Attitudes towards divorce continue to change. As there’s more emphasis on individual fulfillment and happiness, people are less likely to remain in an unsatisfying marriage than in earlier generations.
- Postponed Divorce: Some couples put off divorce. People often wait until the kids grow up and leave home before ending a marriage. Others hang in until they hit a certain milestone so particular retirement benefits kick in.
These are just a couple of common reasons why gray divorce has grown in recent years. Again, no two divorces are ever exactly the same. Motives differ from one case to the next, but frequently repeated themes often appear. Similarly, there are a number of recurring issues to be aware of when divorcing later in life.
Retirement Plans And Gray Divorce
The older we get, the closer we get to retirement. But as with most plans, divorce can derail those aims. The older you are when you end your marriage, the less time you have to squirrel away money for retirement.
A key part of divorce is the division of property, where couples split up the shared assets. Retirement benefits fall into this category. 401(k)s, IRAs, and pensions are all on the table. It’s much more expensive for two people to live separately than together. After all is said and done, what you put aside may no longer be enough to sustain you. In many cases of gray divorce, your retirement may not be as comfortable as planned. Worse yet, you may even have to push it back if you don’t have enough to cover your calculated living expenses.
Social Security And Gray Divorce
Social Security benefits are an important piece of the financial puzzle. How long you’re married and when you divorce have big impacts on this particular source of income. Though the court can’t divide these benefits, it’s important to know how gray divorce influences them.
If you’re married for at least ten years, are at least 62-years-old, and are currently unmarried, you may qualify to collect Social Security based on your former spouse’s employment history. This is most common when one spouse earns significantly more than the other.
If your ex dies, you may also be entitled to survivor benefits, though there are stipulations. Again, the marriage must have lasted ten years, you must be unmarried, and you have to be at least 60, or 50 if you have a disability.
Spousal Support and Gray Divorce
Spousal support is something else to consider in gray divorce. In cases of long marriages with a significant income disparity between spouses, this issue often arises. If you’re the primary earner in a marriage, the court may award maintenance payments to your spouse. A substantial payment, this often impacts retirement. In some cases, it causes people to have to push back when they stop working and radically alter future plans.
We don’t always like to admit it, but many of us are getting on in years. With that, there are a variety of health concerns and long-term issues to account for. These are things to contend with in every situation, but gray divorce specifically impacts many.
Health Insurance: If you have lingering medical expenses and continuing health care costs, health insurance is sure to be a big concern. In most cases after divorce, you can’t remain on your spouse’s insurance plan. And gray divorce is no exception. As this is an important part of your health and wellbeing, plan for this ahead of time.
One strategy couples use in this situation is to choose legal separation instead of divorce. In legal separation, a court order lays out a split between two couples. This includes dividing property, determining custody if there are minor children, and even awarding spousal support. It mimics divorce in many ways, but without actually dissolving a marriage. Because the marriage isn’t technically over, a spouse may continue to receive coverage under the other’s plan. This isn’t always the case, so check your specific policy, but it is a possibility.
Medicare: If you’re eligible for Social Security benefits based on your ex’s work history, you may also qualify for Medicare. Unless you have a disability, however, you won’t meet the requirements until you turn 65. So, if you divorce after 50, but before 65, preparing for health care is vital. Finding your own coverage can be tricky and costly. This is one expense that you should make sure to include when addressing financial matters in your gray divorce.
Long Term Care: Another unpleasant topic related to gray divorce is that as we get older, it gets harder to care for ourselves. Living on our own, maybe for the first time in years, poses risks. We can’t always do everything for ourselves like we used to. This presents logistic and financial concerns.
Caregivers are expensive, whether out-of-home or in-home. So are nursing homes and assisted living facilities. Insurance and Medicare often cover some of these expenses. Some of us have adult children who can help out. But every situation is different, and these are important factors to take into account.
Estate Planning And Life Insurance
Estate planning and life insurance are especially important in gray divorce. Determine who has authority to make decisions regarding your care and property should you ever become incapacitated. Update your final wishes and determine who you want to carry them out. A divorce settlement can include agreements to establish trusts, for instance, to account for a grandchild’s education. You can also protect assets you want children to inherit and lay out how to divide property.
Gray divorce uses life insurance in multiple ways. One way it’s often used is as protection for debts and spousal support. The court often designates oen spouse as the beneficiary of a life insurance policy to ensure continued care.
These are just a few issues that couples face when divorcing later in life. As gray divorce rates continue to rise, a number of specific concerns also increase in prominence. Divorce is tricky in the best of times, but this particular segment of the population faces unique hurdles.
If you have questions about your divorce, feel free to contact Goldberg Jones at our San Diego office.