Navigating divorce in retirement

Here's how a gray divorce can affect your retirement finances.

  • By Tom Sightings,
  • U.S. News & World Report
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Divorce during your retirement years, often called gray divorce, can complicate your retirement plan. Retirement assets may need to be divided, and alimony could be granted after a long-term marriage ends.

Here's how to cope with a gray divorce:

Where to retire comfortably

How much do you need to retire? It depends heavily on where you live.
  • Find out if your Social Security payments will change.
  • Determine what retirement benefits you are entitled to.
  • Consider whether you need to hire a lawyer.
  • Be prepared for the possibility of alimony.
  • Decide if you will keep the house.
  • Be prepared to divide household goods.
  • Communicate with your adult children.
  • Don't forget about pets.
  • Focus on future happiness.

Older couples sometimes drift apart and become dissatisfied with a long-term relationship. Once the kids leave home, some couples split and go on to lead separate lives. Here are some important issues to consider when navigating divorce in retirement.

Find out if your Social Security payments will change

Social Security is a significant source of income in your retirement years, so it’s important to find out how a divorce might impact your Social Security payments. In general, you will be eligible for as much as half of your former spouse’s Social Security benefit, as long as you were married for at least ten years and are currently unmarried, if that amount is higher than the benefit based on your own earnings. Spousal payments are reduced if you start collecting benefits before your full retirement age. However, you may not be able to claim spousal Social Security payments if you weren't married for at least 10 years or remarry. Check your Social Security statement online at my Social Security or stop in at your local Social Security office to get a full understanding of your specific situation.

Determine what retirement benefits you are entitled to

Find out if you or your former spouse is entitled to a pension, and get a copy of the latest statement and the rules and regulations for the plan. Aim to get this information from your spouse or employer. However, you may need the help of a lawyer or mediator to collect and verify pension information and negotiate who gets what. Also, take a look at the retirement account balances you accumulated during the marriage, which may need to be divided.

Consider whether you need to hire a lawyer

Whatever pot of money you have to divide up will be a lot smaller once lawyers get involved. In some cases a divorce mediator can provide a lower cost way to get help dividing up your assets. An equitable solution is usually the quickest way to get on with your life.

Be prepared for the possibility of alimony

If the kids are grown and self-supporting, there’s probably no need for child support. But there may still be alimony involved, particularly if one spouse stayed home to take care of the kids while the other earned most of the income. This can be a delicate issue and is best discussed and negotiated through your attorney or mediator.

Decide if you will keep the house

When the kids are young, the custodial parent is typically the one who stays in the family home. Once the kids are grown up, it may make more sense to sell the house and buy or rent two smaller places. If one or both spouses have a personal attachment to the house, there could be a more complex negotiation. Think carefully about where you want to live as you begin this new phase of life.

Be prepared to divide household goods

If one spouse is keeping the house, then that person will likely keep most of the furnishings. If you’re selling the house, then you have to negotiate who gets what. Family heirlooms will likely go to the person who brought an item into the marriage. Otherwise, you will have to decide who gets the bedroom set versus who takes the patio furniture. But in most households there's probably nothing particularly valuable for you to fight over. Remember that your kids probably don’t want your old stuff.

Communicate with your adult children

Most couples do not want to involve their children in their difficulties any more than they have to. If the kids are in college or living on their own and building careers and families, the practicalities are much easier to finesse. Just continue to support your kids, resist playing the blame game and agree to share time with both your children and grandchildren. Remember, you’re still the adults.

Don't forget about pets

A retired couple is probably more likely to have a pet at home than a child. So don’t forget to decide who’s going to take your dog or cat. Also, remember it costs money to take care of a pet, so include that in any financial decisions.

Focus on future happiness

Divorce is stressful enough. Don’t make it worse by getting bogged down in fighting for the last dollar or arguing over past recriminations. You’ll only end up compromising your health and future happiness. So when vengeful feelings bubble up, focus on creating a positive future for yourself.

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