Getting divorced later in life can be problematic when it comes to retirement. The issue is simple, according to one financial expert. People have been planning and saving for decades. They expected to live off of all of their savings and benefits. With the divorce, assets are split up, and much of that can be lost.
For those who get divorced near retirement age, there’s just not enough time to adjust. For instance, in 1990, the divorce rate was only 4.67 percent for people who were older than 50. By 2009, it hit 9.74 percent, essentially doubling. That means that about 600,000 people who are older than 50 split up in 2009 alone.
In other cases, people who are already retired are splitting up. One expert said that a decade ago she worked with around 5 percent of people who were getting divorced after retiring. Now, she says it’s jumped to at least 25 percent.
Remember, living expenses go up after divorce since you now need two of many things, such as two homes, two sets of utility bills and two insurance policies. Even if retirement savings are cut in half, will they be enough? More people are turning to divorce, so this question is becoming increasingly important.
This whole issue underscores exactly why it’s so important for people to know their rights when dividing retirement assets. For instance, pension plans can often be split, even if they were just earned by one spouse. Things like this cannot be ignored. They could be among the most critical assets a couple controls.
Source: The Fiscal Times, “The Worst Retirement Move You Can Make,” Caren Chesler, accessed Nov. 03, 2017