Gray divorce and your retirement

When a married couple looks towards retirement, they hope to have achieved some degree of financial stability. With the children gone, they may sell the family home, and with the proceeds of that sale, buy something smaller and that they will own outright. This allows them to eliminate the mortgage payment and the hidden cost of interest payments on that mortgage.

But for America’s aging population, the there is another issue they may confront: Divorce. Recent statistics suggests that 25 percent of people age 50 and older are involved in a divorce. This can pose significant trouble for your prospect of enjoying your “golden years” in retirement.

The reasons are varied. This age demographic was known as the baby boom, and they disrupted education and politics when they were in college during the 60s and 70s, and were often derisively called the “Me generation.”

They may be far less willing to settle for the status quo of an unhappy or unfulfilling marriage as their parents may have been. In addition, many of that generation’s women have been working their entire lives and may be more independent than their mothers were.

Nonetheless, divorce is likely to greatly alter your financial plans and change your retirement. A gray divorce does have some advantages. The children are adults, which eliminate contentious battles over custody plans and child support payments.

Your attention should focus on your property division, especially on retirement accounts, pensions, IRAs and 401ks. You will need to carefully examine each asset and its tax consequence to determine the proper mix of assets and to ensure your property division is truly equitable.

Source:, “Retirement: Gray divorce can drag both parties into the red,” Rodney Brooks, special to the Washington Post, April 12, 2016

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