Gray divorce refers to divorces in couples at age 50 or older. The prevalence of gray divorce has increased in the last three decades, with far-reaching implications for retirement funds and long-term living expenses.
Here are some things to know about what happens with your retirement funds in a gray divorce.
Money contributed during the marriage is marital property
If you and your spouse married early in adulthood, there is a good chance that most of your retirement funds grew during the marriage. That makes them marital property which must be equally divided as part of the divorce. Assess the value of each plan and the contributions made during the marriage to determine the asset division that is the most reasonable.
Your retirement fund may not go as far
Supporting a household on a single retirement income is more expensive than it would be on a marital retirement income. You may find that, once divorced, your retirement fund is not going to stretch as far as you had hoped. As a result, many divorcing seniors head back to the workforce for a while to help make ends meet and stretch their retirement accounts as far as possible.
You may get a portion of your spouse’s Social Security
If your marriage lasted for more than a decade, you are legally eligible for Social Security benefits under their account until you remarry.
Gray divorce is becoming a standard part of society. Starting over in your 50s or beyond can give you a chance for new adventures when your retirement funds are adequately divided.