Mature adults are getting divorced more frequently these days compared to 20 years ago. During the divorce process, they are compelled to focus on a unique set of issues, particularly those related to their financial status.
From 1990 to 2010, the divorce rate of adults 50 and older doubled because of an increased number of women in the workforce, longer lifespans, changing perspectives on the institution of marriage and other factors, according to an Associated Press article published in the Sioux City Journal. Citing a study from Bowling Green State University, the article claimed a review of data through 2014 “found the rates have stayed about the same in subsequent years.”
As they deal with a split, adults ages 50 and older have to worry about dividing complicated financial assets and having less time in employment to mitigate the economic hardship of divorce.
One of the first considerations, according to the AP article, is deciding who gets to keep the family home, which likely carries sentimental value for both parties. Each partner should be willing to comprise and consider alternatives that might put them in a better financial position with more manageable housing costs in the future.
Another concern is retirement. A byproduct of divorce is making “a nest egg built for one couple” suddenly capable of sustaining two households, according to the article. Options for dealing with that problem include: returning to the workforce, postponing retirement, selling vacation or rental properties, downsizing to an apartment or smaller home, reconsidering financial commitments to adult children and making alternative lifestyle choices.
“You have to weigh up and reassess what your options are based on what the settlement is,” Terri Munro, a financial planner in Georgia, states.
Older divorcees also have to worry about healthcare, from being removed from a spouse’s insurance plan to not having their spouse as a caregiver. Long-term care insurance is one viable option, but finding “a reasonably-priced plan gets harder as you age,” the article states.
Finally, couples must update their important accounts and legal documents, including deeds, wills, estate plans, retirement accounts and bank accounts. Unless a beneficiary is changed on a life-insurance plan or 401(k) account, the state allows the designated person, even if they are an ex, to receive the funds.
When confronting this series of important decisions and changes, older individuals should work with their lawyer and financial planner to make sure they’ve covered all the bases, made the right assessments and are prepared for life post-split.