In California and around the country, the term “gray divorce” is often used. This is what it is called when couples over 50 years of age decide to end their marriage. The issues in the divorce will largely not relate to children. Instead, there will be financial considerations, and the result can be that your retirement plan is disrupted.
The threats to retirement
Planning for retirement is already difficult enough when both spouses remain together and the marriage is intact. Many couples reach 50 and find themselves behind in retirement planning. The challenges are increased when the couple decides to get divorced. Now, your assets will need to be divided. Suddenly, the nest egg that was going to support one household in retirement will now need to fund two different living situations. There is no question that divorce will lower the amount that you have saved for retirement. The hope is that there is still enough time to save more to replenish some of your savings.
Other estate planning challenges
There may be other parts of your plan that will need to be changed now that you are divorced. Certain powers of attorney and directives may need to be amended to reflect your new family situation. This could impact when you end up claiming Social Security and when you are able to retire from your job. There is no question that divorce could cause you to have to delay your retirement age.
If you are getting divorced later in life, you will need to negotiate the most favorable possible settlement of the marital estate. This may be one of your last chances to secure your retirement, and you do not want to end up with few assets and no prospects of a comfortable life.