According to Investopedia, divorce rates in the U.S. are declining… except for Americans over the age of 50. A survey conducted by a Bowling Green State University professor found that one in four couples over the age of 50 will separate.
Researchers have proposed several theories to explain this trend. Perhaps people are living longer and want to “optimize” the latter half of their lives with better relationships. Or maybe Baby Boomer couples are less likely to compromise due to certain cultural values. Whatever the reason, if you’re considering divorce after the age of 55, you are not alone. Here are a few things to keep in mind:
Understanding Family Finances
If your significant other handled the family finances, it’s essential to familiarize yourself with your financial situation before separating. This includes understanding your budget, assets, debts, and retirement plans. Ask yourself:
- Where are your stocks, bonds, and other assets?
- How much debt do you and your spouse have?
- Could your spouse be hiding critical financial information?
Expect Financial Changes
Divorce often leads to a significant drop in household income. Men’s income typically drops by around 25%, while women may experience a steeper decline of about 40%. Since women tend to live longer, they may need to learn how to manage with less in the long run.
Letting Go of Sentimental Assets
It can be tempting to hold onto assets like the family home for sentimental reasons. However, it’s important to consider the financial burden of maintaining a house, including upkeep, property taxes, and fees. Holding onto the house could leave you “house poor.” Work with an experienced family law attorney to make strategic decisions.
Health Insurance Considerations
If you’ve been covered by your spouse’s health insurance, divorce may lead to a loss of coverage. Consider these options:
- Sign up for coverage through your own employer.
- Enroll in your state’s healthcare exchange program through the Affordable Care Act.
- Pay for a 36-month continuation of your ex’s existing coverage through COBRA.
Facing Age Discrimination
Older women often encounter age discrimination when re-entering the workforce after divorce, especially if they spent much of their adult life caring for family. A qualified attorney can suggest resources to help you retool and strategize to return to work in a fulfilling and financially stable way.
Navigating Taxes
Taxes affect nearly every financial decision made during a divorce. Work closely with your attorney and financial advisor to understand the tax implications of your choices. Consider questions like:
- Should I take monthly alimony or a lump sum?
- Should I keep the house or sell it?
- How much of my spouse’s retirement am I entitled to, and under what conditions?
Need Help?
If the divorce process feels overwhelming, the DiPietro Family Law Group is here to help answer your questions and guide you through the complexities of divorcing after age 55. Call us for a free and private case evaluation at (888) 530-4374.