A divorce inevitably causes significant changes to someone’s daily life and overall lifestyle. Depending on someone’s circumstances, the impact of a divorce could last far longer in some cases than others. For example, some people remain married for decades. During that time, they may have raised children together with their spouses and acquired valuable property. It is common for married couples to buy homes together and to save jointly for retirement.
Once someone starts thinking about the reality of retired life, they may reach the uncomfortable realization that their spouse might negatively affect the quality of their retirement years. Pursuing a gray divorce after years of marriage while over the age of 50 can have certain implications for someone’s retirement. How can a gray divorce affect someone’s retirement plans?
People lose some of their savings
Typically, divorcing spouses have to divide their property with each other. Exactly how they do that depends on a variety of unique factors. The length of the marriage and any pre-existing agreements between the spouses can be essential considerations. Most couples in long-term marriages have to find a way to divide retirement savings or pension resources as part of the divorce process. Typically, that means that the spouses then have less set aside for their financial stability during their golden years.
Benefits applications can become more challenging
Provided that a great divorce follows a long-term marriage, both spouses can potentially still qualify for the same benefits they planned to receive while married. People become eligible for Social Security retirement benefits and Medicare through years of gainful employment.
The law also allows dependent spouses to qualify for benefits after marriages last 10 years or longer. A divorce does not end a dependent spouse’s rights. After a decade or more of marriage, a non-working or lower-earning spouse can potentially still qualify for Medicare and Social Security retirement benefits based on their spouse’s work. However, they may have a slightly more complex application process ahead of them.
People have to maintain an independent household
Dividing retirement savings can put pressure on someone’s retirement plans. Those reduced savings then need to cover all of an individual’s basic expenses. Instead of sharing the cost of housing, utilities and food with a spouse, a divorced individual has to cover all those expenses independently. It is typically less cost-effective to maintain a single-person home than it is to share a house with a spouse. People sometimes need to take on roommates or otherwise adjust their retirement plans because of the cost involved in living on their own.
While pursuing a gray divorce can be challenging, many people view their happiness as their most valuable resource. Obtaining a gray divorce may help someone enjoy retirement without the stress of a frustrating marriage.