First in a Series on Divorce for Seniors
Despite the fact that the divorce rate nationwide is at its lowest level recently, baby boomers are still divorcing at a high rate. For couples over 50 years old, the divorce rate has increased 2 fold over the last 2 decades according to recent studies. This phenomenon is referred to as “gray divorce.” Couples involved in a gray divorce have just as much to worry about as younger couples and sometimes even more. It is a very big subject, but we will focus on a few things that you might not have thought about before.
Splitting incomes gets more complicated with age
There are significant financial ramifications for senior divorce couples. For instance, their ability to earn income has decreased or even stopped in some cases. They are living on fixed incomes such as Social Security, SSDI, annuities, and mandatory withdrawals from investment accounts. When a couple splits their fixed income after a divorce, the individuals involved may not have enough income to live the lifestyle they are used to. Couples must figure out their financial situation after the divorce. By completing a financial affidavit or a monthly snapshot of finances, each individual will have a better understanding of their sources of income and their monthly expenses. Once the sources of income and amounts of income have been sorted out, the couple should consult with their legal and financial advisors to discuss the financial impact of a divorce on retirement as individuals moving forward.