Ending a marriage at any time in life is a big decision and can often give rise to some unexpected complications both personally and financially. For couples who decide to seek a divorce as they near retirement age, there are some unique questions that need to be resolved. Divorcing after age 50, sometimes referred to as a “grey divorce”, puts couples in the unique position of creating a divorce agreement that also aligns with a quickly approaching goal of retirement. This is less of an issue for people who still have many years of work ahead of them to rebuilding their savings, but is a crucial consideration for those looking forward to cashing in their 401(k) accounts.
One big difference for older couples is the role of alimony in the process. For younger couples, spousal support payments can be important as one spouse gets back on their feet financially or seeks job training to make up for time spent away from the workforce. Spousal support payments are designed to maintain the standard of living that the family had during the marriage, transferring extra income to the spouse with less earnings or more costs. In a grey divorce, spousal support payments may be appropriate while both ex-spouses are still working, but what about when it is time to retire and each will be relying on a similar reservoir of savings?
Along with the issue of spousal support, people seeking a divorce later in their lives may have a harder time getting back into the workforce if that is necessary following a split. While age discrimination is illegal under federal and state employment laws, the fact remains that it can be tough to overcome stereotypes and bias when seeking a new job or starting a career as a mature adult.
Source: Huffington Post, “The Gray Divorce,” Henry Gorbein, March 6, 2013
More information about spousal maintenance in the state of Colorado can be found on our Westminster alimony page.