Divorce studies show that more older couples are calling it quits than ever before. This phenomenon is known as the “Gray Divorce.”
Between 1990 and 2012, the number of divorces doubled among people age 55-64. The rate tripled for those 65 and older, according to a Forbes and Bowling Green State University study. This has presented unusual challenges for family law attorneys.
Couples are splitting later in life because it is more accepted by society. Some people wait until their children are older and able to handle the divorce. Whatever the reason, couples planning to untie the knot should consider several steps if they are going through with a divorce.
When couples split earlier in adulthood, they have more time to recoup their financial losses. But once you get into your 50s and 60s, you have fewer working years to recover financially. Longer-married couples have built up substantial savings in several retirement plans – and unless a careful analysis is done, important provisions and the value of various retirement plans may be overlooked.
Financial planners recommend avoiding tax penalties when splitting assets. To split up some assets, a divorcing couple will need a Qualified Domestic Relations Order (QDRO), which will help protect the husband and wife from owing taxes when retirement funds are transferred from one to the other.
Take a close look at your savings. For example, how much you have in your 401(k) and how much you are contributing to it. Social Security benefits are tricky, too.
Many couples don’t realize that a divorced spouse can qualify for part of their ex-spouse’s Social Security benefit if their marriage lasted at least 10 years. The divorced spouse must be at least 62 or older and unmarried before he or she can file a claim. If you’re unmarried and your ex is remarried, you can still file a claim on his or her benefits. But if you remarry, you typically can’t collect benefits on your ex unless your latter marriage ends.