Financial Pitfalls of “Gray” Divorce
The pitfalls of filing for divorce at any age are discussed with some frequency in Chicago, Cook County and the surrounding areas. In recent years, scholars and legal practitioners have begun to discuss the implications of divorce when you are already retired. According to a recent article in the Washington Post, we are not thinking about the pitfalls of “gray divorce”—or divorce for people over the age of 50—perhaps as critically as we should. Indeed, as the article points out, Americans are living longer, and “baby boomers are divorcing at an unprecedented rate.” Given these two facts alone, we should all be paying more attention to the economic implications of later-life divorce.
Splitting Your Nest Egg Between Two Households
When you decide to file for divorce in retirement, you must be prepared for the fact that you will simply be living on less money than if you remained married and living with your spouse. For instance, as the article emphasizes, “that nest egg you worked so hard to accumulate must now be split and support two households instead of one.” Such a “splitting” of retirement savings may be more common than most Chicago area residents would believe. To be sure, about 25 percent of all Americans who currently go through a divorce are over the age of 50.
Do not make the mistake of assuming that keeping your marital home may allow you to maintain a lifestyle you became accustomed to during your marriage. As an article from U.S. News & World Report points out, seniors who want to stay in the marital home need to recognize that the home has a value. As such, in order to keep the house, that spouse will need to give up something (likely significant) in order to balance out the division of property. But when a single person decides to remain in a home that was previously the responsibility of at least two people, the financial costs could be greater than expected. Indeed, many seniors who get divorced and keep the marital home are not thinking about the high taxes associated with the property (which were previously shared between spouses) or the maintenance costs of the home.
Even for wealthier couples, the Washington Post article declares, the standard of living shifts after a gray divorce. Typically, there is just not enough money to maintain a particular lifestyle when you begin splitting assets.
Other Factors to Consider
In addition to the sheer financial impacts of divorce during a couple’s retirement years, there are other issues to consider. For instance, many married couples wait to divorce until they are older because they have concerns about their children and the potentially detrimental impact of child custody proceedings. However, as the U.S. News & World Report articles underscores, just because you are getting divorced when you are older does not mean your children are entirely absent from the equation.
To be sure, the article intimates that many seniors discover that their adult children “react emotionally to their parents’ divorce.” While a gray divorce usually eradicates the need to deal with issues of parenting time and parenting responsibilities, the emotional and psychological effects of divorce may exist regardless.
If you have questions about filing for divorce in retirement, you should discuss your situation with an experienced Chicago divorce lawyer. An advocate at the law offices of M. Scott Gordon & Associates can help. Contact us today to learn more about our services.