The term, “gray divorce” has become a hot topic within the last few years as the rates of older couples getting divorced has steadily increased. However, a later-in-life divorce can drastically change one’s retirement goals. After all, one’s net worth is essentially cut in half overnight. And, regardless of how big that half may be, 50 percent is never as good as 100 percent. Naturally, those considering a gray divorce then have questions.
What is a gray divorce?
Gray divorce has a few different definitions, but, generally speaking, it refer to a divorce that occurs between spouses that are 50 or older. The divorce rate among these people has been increasing since the 1990s as our society has grown ever more accepting of divorce. In addition, along with longer life expectancies, the trend has increased as two working spouse families become the norm, and women now have the financial freedom to divorce. Of course, a lot of parents wait to divorce until after the children leave the nest, which also puts those divorcing couples into their 50s.
What about one worker households?
For the breadwinner, a gray divorce means that, at least for some time, they will be supporting two household and, maybe, even college tuition. For the non-working spouse, they will now have to rejoin the workforce after, perhaps, decades out of it. Retirement in either scenario can be a scary proposition. This is when hiring a financial planner can be so important and why many divorce attorneys include them on their team.
Social Security for one worker households
The Social Security Administration describes how Social Security benefits are calculated and they are based on one’s contributions, even if married. Though, if one was married for at least 10 years, the ex-spouse has not remarried and is at least 62, one still may qualify for
Social Security retirement or disability benefits. In essence, this means that the working spouse will receive their full benefit amount and the non-working spouse half. Indeed, this means that, for some gray divorcees, SSA will pay 1.5 times a worker’s Social Security benefit amount to ensure both spouses are covered.
What if one needs help?
As one can see, Cincinnati, Ohio, gray divorces are complicated. This is why experts suggest working with a family law attorney and financial advisor to ensure the unique issues of gray divorces are handled appropriately.