The age of the people divorcing is largely what separates a “gray divorce” from any other divorce. People in their 50s or beyond who have spent decades together may face a complicated process when they choose to end their long-term marriages.
Frequently, people worry about gray divorce because of the economic implications. They may feel anxious at the thought of losing or diminishing their retirement savings and pensions. They may also worry about the benefits that people rely on during their golden years.
Those who are familiar with the rules that apply to gray divorces and retirement resources may feel more confident about pursuing their independence during their golden years. What do spouses need to know about retirement support and gray divorce?
Pensions and savings are often divisible
Typically, a pension or work-related retirement savings account is in the name of one spouse. That does not make it the separate property of that spouse. Instead, any contributions that were made during the marriage are potentially subject to division.
Spouses can directly divide retirement savings accounts and pensions as part of their property division in divorce. They can balance them by adjusting the allocation of other resources. They can even use alimony as a means of sharing pension proceeds during retirement.
Benefits are still accessible
Sometimes, one spouse relies on another for eligibility for retirement benefits. Many older adults receive Social Security retirement benefits after years of gainful employment once they are old enough to qualify. They can also receive Medicare health insurance.
Those benefits are also available to lower-earning or dependent, non-working spouses after a divorce. Provided that the marriage lasted at least 10 years and the dependent spouse does not remarry, they can receive benefits based on the employment history of their spouse even after the divorce. A dependent spouse making a claim for retirement benefits through Social Security after a divorce does not diminish what the wage-earning spouse receives.
People who plan carefully in the early stages of a divorce can ensure their financial stability even during retirement. Getting experienced legal guidance can help older spouses more effectively prepare for an upcoming divorce.