Divorce can be a retirement barrier and economic burden for baby boomers
Gray divorce can be financially burdensome and complicated, since older spouses often have complex assets and lack time to make up for financial losses.
Getting divorced can be financially strenuous for most people, regardless of their age or financial standing. For Wellesley couples divorcing after age 50, the associated financial challenges may be especially pronounced. Reports indicate that for many couples, living independently and saving for retirement after gray divorce can be difficult. During these divorces, ensuring a fair settlement with a reasonable division of property and any necessary spousal support is critical.
Troubling financial facts
Gray divorce can be financially strenuous because it leaves separating spouses little time to rebuild their retirement savings. According to USA Today, the sudden expenses associated with financing two separate retirements are not trivial. Compared to one shared retirement, two independent retirements may cost 30 to 50 percent more, according to financial planners.
The risk of poverty is also significantly higher among spouses who divorce after age 62, according to The Chicago Tribune. Just 4 percent of married couples in this age bracket live at or below the poverty line. However, 14 percent of divorced men and 30 percent of women in the same age group qualify as impoverished.
Given these financial issues, arriving at a fair division of assets and appropriate spousal maintenance orders during divorce is crucial. Unfortunately, gray divorces often involve complex issues that make reaching an appropriate arrangement more challenging.
Difficulties during divorce
Property division can be a complicated process during gray divorces because of the nature of the marital property. Next to younger couples, older couples typically have accumulated more complex property, such as retirement accounts. Properly valuing and dividing the following property can be difficult:
- Pension plans
- Stock options
Worsening the issue, many divorcing spouses don’t pursue all of the property they are due, according to The New York Times. Feelings of stress and sadness may prevent some spouses from fully appreciating or analyzing the financial effects of the divorce. Due to these same emotions, spouses may wish to avoid conflict rather than fighting over property. However, spouses who don’t seek a fair division of property risk forfeiting assets that they realistically cannot afford to lose.
Navigating a Massachusetts divorce
In Massachusetts, family law judges have considerable discretion in dividing property equitably between divorcing spouses. Judges may consider a spouse’s age, health, financial standing, employability and financial need. Based on the same factors, family law judges may also award alimony payments to the economically disadvantaged spouse. Thus, the way that spouses present their assets, needs and general personal situations may be impactful.
Given the financial risks inherent to gray divorce, anyone preparing for one in Massachusetts should consider consulting with an attorney. An attorney may be able to help a spouse work toward a settlement that protects the spouse’s rights and long-term interests.
Keywords: divorce, property, division, assets