Divorce after 50: Challenges & Considerations
For married couples over the age of 50, divorce has become another rite of passage. The baby boomer generation is setting new records for divorce. In September of 2013, The New York Times reported that the divorce rate among couples 50 and older has doubled since 1990. The article noted that "[i]n 1990, 1 in 10 persons who divorced was 50 or older. By 2011, according to the [Census Bureau's] American Community Survey, more than 28 percent (more than 1 in 4) who said they divorced in the previous 12 months were 50 or older." These numbers are especially significant because married couples over the age of 50 account for half of the married population.
While the number of people over 50 that are divorcing has increased, the divorce process has not gotten any easier for those involved. For this generation, some of the biggest challenges will include dividing up the marital assets that have accumulated over the years and for many, taking control of their finances for the first time. Listed bellow are some challenges and considerations for those individuals over 50 who are considering getting a divorce:
- Real Estate - Who gets the family home?: Even when the kids are out of the house and living on their own, the family home can be a source of emotional attachment. Memories - good and bad- were made there and it can be difficult to give it up. However, at this stage in life, it may be in the wife's and the husband's best interests to sell the residence. It may be too large, too expensive and too much maintenance for a single person to handle. The equity built up in the home over the years can be divided and used to buy each spouse a home of their own.
- Tax Liabilities and Retirement Accounts: The longer a couple is married, the closer they are to retirement. The closer they are to retirement, the more difficult it is to re-build the retirement nest-egg after divorce. Just like many other assets, retirement accounts are subject to division during divorce proceedings. It is important that each spouse takes the time to evaluate the benefits and value afforded by each retirement account or annuity. Each spouse will also need to take time to evaluate their future earning potential. In many cases, a divorce couple will need a Qualified Domestic Relations Order (QDRO) issued by a judge, which will be used to divide up retirement plans. QDRO's are necessary to protect each spouse from potential tax penalties when retirement plans are transferred.
- Medical Insurance: For many married couples, one spouse will be covered by the other spouse's health insurance coverage through a family policy. Medicare does not kick in until 65. It is important that you explore your medical insurance options. If a party has received insurance through their spouse, it may be possible to continue insurance coverage through a COBRA program (although it can be expensive). Another option is to purchase coverage insurance through the health insurance marketplace created by the Affordable Care Act ("Obamacare"), which provides various subsidies to make health insurance more affordable. Perhaps a last-resort option is to consider a legal separation instead of a divorce if neither of the above options is viable.
- Spousal Support: Although many married couples today are both working, in some cases one spouse has sacrificed their income earning potential in order to raise the children. If one spouse has been primarily supporting the other for a significant period of time, then that spouse can expect to continue to support that spouse even after divorce. Such support payments may be temporary, permanent or used to rehabilitate a spouse so that she/he can be financially independent.
- Social Security Benefits: Check out the Social Security website regarding information on how to collect your ex-spouse's Social Security benefits. If your marriage lasted 10 years or more and you are 62 years or older, you may be eligible to collect retirement benefits on your former spouse's Social Security record.