When most couples get married, they dream of a lengthy and happy life together, raising children and having successful careers until ultimately reaping the rewards of those years in a comfortable retirement.
However, more couples over the age of 50 are choosing to end their marriages – in so-called gray divorces – than ever before, as the divorce rate for older couples has more than tripled since 1990.
Potential impacts for older couples considering divorce
Retirement plans for younger couples going through a divorce may see minimal consequences as both spouses have many years remaining to save money. But for couples who are in the middle of or late in their careers, many issues must be considered, including:
- When you can retire: Unless a prenuptial or postnuptial agreement exists spelling out how property is divided, marital assets can be shared under New York’s equitable division laws, meaning one or both ex-spouses may have to work longer than they planned.
- Where you will retire: If children are still minors, custody issues may determine where you can spend your retirement. If an ex-spouse wants to leave the state, he or she may feel pressure to stay put if the other wants to remain so both can spend time with their kids.
- Social Security payments: If you retire and file for Social Security benefits, underage children are eligible to receive payments predicated on your earnings. Understand who can receive benefits and how much they will get as it can affect your child support payments.
- Consider a DRO: When dividing retirement funds earned during a marriage, a domestic relations order (DRO) may be warranted to avoid incurring taxes and penalties that could result in accessing your retirement funds before you reach retirement age.
Divorce doesn’t have to ruin your plans
While divorce later in life can have significant effects on your emotional and financial well-being, understanding the impact and how to make adjustments can help you regain your footing. An experienced family law attorney here in New York with extensive knowledge of estate planning and wealth management will tailor their efforts according to your needs.
