Divorce after the age of 50 is becoming more common every day. Some may think older people feel more financially secure in taking this step.
However, “gray” divorce, as it is sometimes called, brings financial concerns that younger people do not face.
Financially speaking, older people have less time to recover after a divorce than when they were younger. The nest egg they thought they had is about to be split in two and there is not enough time now to replace the funds that will vanish during the divorce.
A lifestyle change
Anyone married for many years has likely accumulated assets such as a marital home and possibly other properties along with vehicles, retirement accounts, furnishings, and collections. This may sound like a lot, but once the division of property is over and certain items sold or disposed of in some other way, the post-divorce budget may demand a downsizing in terms of lifestyle, which may come as something of a shock.
Tax implications may represent another shock. For instance, many women want to keep the marital home, but that comes with upkeep, property taxes, and possibly an existing mortgage. It is an illiquid asset, which can put a strain on the new budget. Taxes also accompany other assets as well as alimony, so it is important to understand the whole picture before agreeing to a settlement.
A look ahead
The best advice for those facing a gray divorce is to become educated about finances, both current and future. The main concern for an older person facing divorce is financial stability in the years ahead.