Retirement divorce a growing crisis
There’s a growing trend of spouses leaving their marriages after 15 to 20 years and getting a retirement divorce. In fact, the divorce rate for people over 50 doubled from 1990 to the late 2000s, according to census data. But while Baby Boomers may have accepted the norm of instant gratification, legal experts suggest this new trend can be one of the most dangerous financial decisions a couple can make.
Retirement divorce hurts the middle class
Retirement divorce might be financially okay for couples who have plenty of money, but retirement divorce can be devastating for those who are in the middle class and live pay check to pay check. Now, instead of splitting the costs of one house and one car, the couple has to support two households. This can be especially difficult given that many individuals in their late sixties and seventies may not work and frequently have increasing medical costs.
Am I too old to recover from a retirement divorce?
Experts suggest divorcing while in retirement can be one of the most devastating financial decisions a couple can make, especially if the spouses are supporting themselves with their pension or Social Security payments.
Couples with valuable property or assets may fair a bit better and be able to weather the storm, but if they live in a depressed real estate market and the value of their home has decreased or they cannot sell their home, it can still be difficult.
Living separate lives
So what do experts suggest? Many divorce lawyers suggest the answer may be to fore go the retirement divorce and simply live in separate homes and have separate lives. Couples can even formalize the arrangement with a separation agreement. Couples can also start to sell and redistribute their assets without the animosity and pressure of an impending retirement divorce.
Suggestions for a retirement divorce
In a recent article published by The Fiscal Times there were suggestions made about how couples can protect themselves if they are considering divorce after retirement. For example, the article suggested protecting the assets of each spouse through a prenuptial agreement and being flexible. For instance, the spouses might agree to a lump sum payout for spousal support versus a monthly payment (which might not always be available).
Other suggestions included trying to settle the case out of court through mediation and considering waiting a few years, especially if you are the one who is currently working and would be required to pay spousal support. If you wait until you are retired the amount you will have to pay could be substantially less.
Finally, consider staying married. No one is suggesting staying in an abusive relationship, but if you think you could live apart and stay married it could be better for both parties. Yes, you might want to spread your wings, travel, and avoid taking care of anyone but yourself, but experts warn it is important to take a hard look at what that may really mean for you financially. Unfortunately, you may find yourself greeting shoppers at Wal-Mart rather than scaling the Great Wall of China.