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Grey Divorce and Retirement – Some Things To Know

Grey Divorce and Retirement – Some Things To Know

By Susan Williams

No matter how old you are a divorce can be difficult time in someone’s life. It’s an emotional situation often filled with high levels of stress and anxiety.

But divorce at an older stage of life can even be more complicated as people are often dealing with more than just a separation in their relationship. There is also the additional complexity of separating and dividing their assets. And this situation can also significantly impact a person’s future retirement savings and plans.

Also Read: Call It Silver Separation Or Grey Divorce – Either Way It’s On The Rise

In the following video by BNN Bloomberg a panel of experts discussed the rise of the “gray” divorce and what the potential impacts may be on retirement.

Here are some of the highlights of what they shared;

Gray Divorce Implications

  • Baby boomers are getting divorced. It seems to be often be happening around a couple’s 25th anniversary. This is typically the time when the kids have left home and the couple is now on their own. As one of the panel experts says, “Divorce happens”.
  • Dealing with a home, dealing with pensions, dealing with savings, dealing with debt all have to be managed. For example, if a couple was living off of a line of credit, that debt will need to be closed given that the couple is not splitting.
  • Couples that divorce at an older age tend not to remarry. They may move onto other relationships and live common law. However people should realize that living common law often comes with the same responsibilities as being married – for instance spousal support.
  • Future inheritance may also be another area that needs consideration as people move away from a relationship.
  • Couples need to be very mindful of assets and debts as they move into a divorce later in life

Re-Retirement Planning

  • Whether someone is newly single or with a new partner after a divorce, the retirement plan needs to be reset based on the new living situation
  • A new baseline, assets and assumptions¬† all need to be re-calibrated based on the new lifestyle. More than likely the numbers will have come down so this means that someone may have to now work longer or even start working to compensate for any gaps
  • Often people are surprised by how little they actually have left for retirement after a divorce

Legal Things to Consider In A Gray Divorce

  • When a person divorces, this action does not change their will. The only thing that may change in a will is if your ex-spouse was the executor, they would no longer be however everything else remains the same. So the will must be updated after a divorce
  • Power of Attorney for health and property also need to be updated
  • As exhausted as people may be at the end of a divorce, ensuring that the proper legal paperwork is in order is critical to ensure that there are no future problems

Divorce always tends to be a complicated and emotionally challenging situation however sometimes change can also be a good thing. You just want to try and get there as easily as you can.

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Susan Williams is the Founder of Booming Encore. Being a Boomer herself, Susan loves to discover and share ways to live life to the fullest. She shares her experiences, observations and opinions on living life after 50 and tries to embrace Booming Encore's philosophy of making sure every day matters.