With life expectancy being so high, couples who have been together for many years have more time to grow closer—or grow apart. Divorce rates in the U. S. are declining generally, but not in couples over 50. Rather, this subgroup now experiences divorce in one out of four marriages.
Why is the divorce rate higher for older couples?
Often, couples with marital problems stay together for the sake of their kids, but most older couples are empty nesters. Another factor is that more women have careers than ever before. This leads to financial independence, which can remove the fear of financial instability following a divorce. Lastly, there is less stigma attached to divorce now, which gives some couples the confidence to decide on something they may have been contemplating for many years.
Avoid these costly mistakes
When filing for divorce over the age of 50, there are going to be significant financial consequences, perhaps more so than at any other time of life. Living as a single person is much more expensive, and a late-in-life divorce can greatly impact retirement plans—and not in a good way. Avoid these financial missteps to preserve your assets.
- Failure to account for all assets at the appropriate value. No matter who handled the finances during the marriage, it’s vital that both spouses understand the assets they possess in a divorce.
- Holding on to the house when you cannot afford it on your own. Homes have great sentimental value, but it’s not worth it to drain your assets in order to hold onto a piece of the past.
- Not calculating what you owe. Keep in mind that you and your spouse may end up splitting debt.
- Ignoring taxes. Taxes are inevitable in divorce asset division, but you should do what you can to minimize financial consequences.
- Forgetting about insurance. If you have previously received insurance from your spouse’s employer, know that getting your own insurance could be expensive. You have options, but you should plan to incorporate this new cost into your budget.
- Rolling over a retirement plan into an IRA. It may be advisable to get a qualified domestic relations order (QDRO) in order to make a one-time withdrawal from the retirement account without fees rather than pay a steep price for early withdrawal later.
- Supporting adult children. Remember, funding your own living and retirement must come first at this point.
- Hiding assets. This is a dangerous practice that could result in penalties and fines by the court if you’re discovered. It’s not worth the risk.
- Low-balling your monthly budget. Don’t underestimate the amount of money you need to live comfortably.
Divorce can be devastating emotionally. You may feel like some aspects of this situation are outside your control. But making smart financial decisions is still well within your power.