Divorce is not easy at any age, but when it occurs later in life, it can present challenges unique to spousal separation, especially when it comes to finances. These challenges are becoming more apparent as the rate of gray divorces (defined as divorces that occur later in life among older adults) rises.
After getting divorced later in life, he said, “Both husband and wife have seen their assets cut in half.'' USA Today, based on a recent report by researchers at Bowling Green State University in Ohio. However, the impact on living standards is not always felt equally. “Men can expect their standard of living to fall by 21% after a gray divorce,” while women can expect to see a “45% decline in their standard of living.”
Why do gray divorces cause obvious financial problems?
Divorces at any age require the unraveling of an integrated life, but in gray divorces, “divorce settlements involve dealing with spouses over decades of finances, not to mention things like estate planning and estate planning.” You need to combine your assets with a “college savings plan for your grandchildren and other long-term funds and plans,'' he said. smart assets.
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Furthermore, he said CNBC“Economic disparities appear to be more gradual because younger women are more likely to work than older women.'' This is primarily because “many older people who divorce today It has to do with the fact that they adhere to the traditional concept of being the sole breadwinner of the family.
How can you protect yourself financially in the event of a gray divorce?
While we hope that a gray divorce is never a reality you have to face, it's always wise to think ahead in case the worst happens.
For one thing, CNBC said, people should try to “be proactive with their household finances.” Neither spouse should be left “in the dark about their household expenses, savings, mortgage payments and interest rates.” Otherwise, “such information could be surprising in the event of a divorce.” By staying involved, you can also avoid rusting into the nooks and crannies of managing your finances in case you someday need to take on the task alone.
Second, it's important to “have access to your money,” CNBC said. While it's not uncommon for spouses to combine their financial accounts, it's still important to ensure that each partner has access to his or her own funds so that if the relationship sours, your spouse won't turn off the financial faucet. It is important to do so. You may also consider starting to save for retirement or invest in your own account in case you ever need it.
And finally, even if you're already married, it's not too late to draw up a postnuptial agreement that “contains provisions that protect the woman financially, for example, if she quits her job to care for her children.” Not too much, CNBC said, quoting Natalie. Ms. Colley is a New York-based CFP and senior lead advisor at Francis Financial.
What should you keep in mind when going through a gray divorce?
If you are going through a gray divorce, there are some considerations to keep in mind.
For one thing, he said kiplinger, “Assembling a team of lawyers, financial planners, accountants, etc.” can be helpful in navigating the divorce process. Also, be sure to vet the people you hire. For example, Kiplinger said, “Beware of lawyers who tell you that you can 'win' without pausing to understand your situation and motives.”
Second, it's important to try to remain as realistic as possible, even though emotions are likely to run high. For example, when it comes to a marital home, “all costs of owning and maintaining the home should be considered before deciding who gets it,” USA Today said.
And even if you're tempted to cling to your old lifestyle, be prepared to adjust your budget as necessary. SmartAsset says that not only “the aftermath of a gray divorce will take a huge toll on your retirement,” but “you also need to plan for health insurance coverage and other unavoidable expenses.” The dependent spouse will lose health insurance coverage. ”
