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Is divorcing when you are about to retire a good idea?

On Behalf of | Oct 20, 2021 | Divorce

Divorce among older people, or gray divorce as some call it, continues to rise. There are several reasons for this. First, divorce is now more socially acceptable than it used to be. Second, modern women are more likely to have had careers and financial independence than past generations.

While divorce is not easy at any stage of life, there are several specifics you need to consider if you are close to retirement — as well as potential solutions. 

Divorce can have a significant effect on your finances

The divorce itself will cost money, although there are several ways to reduce this. The greater financial harm may lie in the future:

  • You might lose health care entitlement: If your healthcare cover comes through your spouse’s employer, you will almost certainly lose it when you divorce. Taking out a new, individual policy may cost more than you think, especially if you have already been diagnosed with specific conditions that insurers are reluctant to cover. Make sure you understand your Medicare entitlements and other options — or ask for extra in your divorce to cover these costs.
  • You might lose your entitlement to Social Security retirement benefits: The length of your marriage may affect your entitlement if the cover comes through your partner’s contributions. If you have been married 10 years or longer, you will not — but it is still wise to have a chat with a Social Security representative about your position.
  • You might lose future inheritances: As a legal spouse, you may be in line for things such as life insurance or retirement plans from your spouse’s estate. Divorce may mean they name someone else as the beneficiary. You may still be able to claim a share of specific assets, but make sure you understand how to before filing to end your marriage. Otherwise, your spouse might move assets out of your reach.

Staying in an unhappy marriage is not ideal for anyone. Once you understand the financial implications of a divorce, you can weigh up how to ensure you leave the marriage in a solid financial position — and that’s what good divorce planning is all about.

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