Grey Divorce and Retirement
Grey divorce, or divorcing in the later years of your life is on the rise. As more baby boomers enter retirement they seem to be saying to one another that they don’t want to spend the last segment of their lives married to the person they raised their families with.
I have a couple of theories on why this is happening, one is that, family life takes over and swallows your relationship as a couple, the business of running a household takes on a life of its own. It is easy to neglect your relationship with your spouse when there is a seemingly nonstop flow of activities between work, soccer practice, birthday parties, cooking, laundry and all of the other busyness it is easy to grow apart and takes work to maintain connected.
This is compounded with both parents working, as most of us do, the juggling feels endless. “How does your afternoon look for you, can you pick up our son from baseball while I get daughter from daycare? On the way back I will stop at the grocery store if you will start laundry.”, this becomes your dialogue together. Prior to children you probably spent your time together, together or together with friends, talking about what ever is of interest to you both, traveling, reading books, doing things as a couple.
Once the children grow up and leave, it becomes apparent how far apart you now are from one another and after 20 or 30 years, that connection can be difficult to reignite. And if your relationship wasn’t nurtured over the years maybe you don’t even remember why you liked that person to begin with. The children are grown, so why stay together.
The reasons are endless but this seems to be dominate situation that I have witnessed, there was not an affair or abuse, the couple simply grew apart.
Deciding to divorce at this stage of life has one prevailing implication. Retirement, what do we do about retirement? If you are at or near retirement you cannot afford to make financial mistakes during divorce, you do not have time to recover from a poorly planned divorce.
Here are the top four financial pieces that absolutely must be done correctly if you are divorcing close to retirement.
1. Understand your social security benefits, can you claim half of your spouses benefit and how does that impact your benefit?
2. Pension planning, will the pension continue in the event of the death of your spouse? And if so what is the percentage? It may be 50% or 65%.
3. The marital home, if you are unable to maintain the marital home on your own from day one, without dipping into savings, do not keep it. If you have to sell it in one year, you should sell it now.
4. Alimony, most long term marriages have an alimony component, does this alimony end in the event of your former spouses death? You may want to insure that lifetime payment using life insurance and/or proper estate planning.