TX couples going through gray divorce face unusual financial challenges
People divorcing after age 50 must consider complex issues, such as retirement account division, and they have little time to make up for financial errors.
During the last several decades, divorce has become more common for Round Rock couples of most ages. Over the last 20 years, this trend has become especially clear among older couples. The rate of “gray divorces,” which involve couples over age 50, doubled from 1990 to 2010, and the divorce rate for couples older than 65 increased even more markedly, according to The Washington Post. In 2010, gray divorcees represented one-quarter of recently divorced Americans.
Age may be the factor that defines gray divorces, but it isn’t the only variable that makes these divorces distinct. Unfortunately, people who divorce later in life may face a number of financial challenges and considerations that younger couples typically do not encounter.
One of the main challenges of gray divorce is that both spouses are left with little time to remedy any financial missteps or losses, according to Dallas News. Retirement is usually not far ahead, and even if a married couple was on track to fund a joint retirement, the couple not be positioned to fund two separate retirements, even if property division is fair. An uneven division of assets can further exaggerate the financial challenges of gray divorce.
Spouses who find their savings suddenly falling short may have to delay retirement or start working again. Unfortunately, people who left their jobs may have trouble reentering the job market and finding a position with adequate income. Spouses who gave up more lucrative or demanding opportunities at work for the sake of the marriage may also struggle to support themselves after the divorce.
Besides stretching existing savings to cover two approaching retirements, spouses who divorce at a mature age also have to worry about several complicated financial issues. These include:
- Whether to keep valuable or sentimental assets, such as the marital home. Unfortunately, keeping certain property may not be financially feasible for either spouse. The full costs of any property, including taxes, insurance and maintenance, should always be factored in before spouses make a decision.
- The availability of Social Security benefits, such as retirement benefits. If one spouse receives Social Security benefits, the other spouse may be able to collect a payment based on the beneficiary’s earnings record. This is only an option if the second spouse is at least 62 and the marriage lasted at least 10 years, so this consideration could affect the timing of a couple’s divorce.
- The best means of dividing retirement accounts. Pensions, stocks and other retirement savings accrued during the marriage are considered community property in Texas, but this property can only be divided by a qualified domestic relations order. Spouses who fail to work with a professional may fail to receive the property they are entitled to, which could prove costly in the long run.
When considering all of these factors, spouses may benefit from speaking with financial and legal professionals to develop a better idea of what to expect during the divorce and life afterward.
Given the high financial stakes gray divorce usually involves, qualified advice before the divorce proceedings begin can be beneficial. Meeting with a family law attorney may help a spouse better understand his or her rights under Texas laws, along with other considerations that may affect the eventual divorce settlement.
Keywords: gray divorce, retirement, assets