The divorce rate among those over 50 is rising. While a separation represents a significant life shift for anyone, those above this age face additional considerations.
A longer marriage means there is more marital property, and at this point, you not only have more assets, but likely more high-value assets. External factors related to wealth and earnings also impact life after divorce. Here are some things to keep in mind.
Standard of living following divorce
Few people emerge from a divorce with their finances unharmed. According to a Bloomberg report, one study found those who divorce after 50 should expect their wealth to drop by an average of 50%.
Income also takes a hit. For women above that age, their standard of living falls an average of 45%. For men, that figure is 21%. Younger individuals generally experience a much smaller impact.
It can be hard to fully recover from these changes. You simply do not have as much time to make significant gains before reaching retirement.
How to approach the financial side of divorce
If you’re over 50, how should you approach the financial aspect of divorce? One writer suggests viewing it as similar to a business deal. Some of the key issues that need to be resolved include:
- Maintenance: Income is often higher for older individuals, but determining maintenance can be more complex due to types of income. For example, many people earn money beyond a base salary, and this needs to be accounted for.
- Pension plans and retirement accounts: Because these may be considered marital property, they are subject to division. They can be among the most valuable assets in a separation.
- Social Security: Collecting a portion of a former spouse’s Social Security earnings is not automatic. Instead, it’s guided by a host of different rules and regulations.
- Inherited property: While inheritance is generally considered separate property, any co-mingling into marital assets can change things.
There is a lot at stake in a divorce. By knowing the potential ramifications of each decision, you can help plan for the future while protecting yourself and your loved ones.