The National Center for Family and Marriage Released a surprising study that showed divorce rates between adults 50 and older doubled between 1990 and 2010. Now, 1 in 4 divorces in the United States is between couples over 50.
On some level, this is good news. It means that the lower stigma of divorce has allowed unhappy couples to break out of empty marriages. This is also a sign that women feel financially secure enough to cut the cord. However, divorce can have a profound financial impact on a woman and affect her ability to retire on time … or at all. How will divorce after 50 affect your retirement plans?
Women Have Less Income to Save for Retirement
Women tend to earn less money than their male counterparts. Many women seek jobs in lower-paying fields (like teaching), work fewer hours, voluntarily drop out of the workforce to raise children, and take slower paths up the corporate ladder to achieve a better life and family balance. While young women are making impressive gains in closing the pay gap (women 16 to 34 earn 90% of what men are paid), women ages 35 to 64 still earn 77 – 80% of the income of their male counterparts even when working in the same positions. This represents a woman’s primary earning years, meaning that by the time she enters retirement, she has likely been able to save less money for her retirement.
Less savings means less growth in a retirement account and a much lower bump from the power of compound interest.
Loss of the Home
For many married couples, their home represents their greatest asset and can act as a piggy bank for equity if they happen to need more money in retirement. During a divorce, a woman may lose her home or be forced to sell. (Learn the pros and cons of Keeping Your House After Divorce.) Now on her own, she may have trouble affording a home and be forced to rent or to stay with adult children. That means that she won’t have a valuable asset to sell or refinance in retirement or the option to free up equity through a reverse mortgage.
No More Shared Costs
The home represents the largest example of a big cost that is typically shared by a couple. However, there are innumerable examples of other costs that a woman will have to shoulder on her own after a divorce. She will have to pay for all of her utility bills, all of her food, and all of the normal household disposables like laundry detergent and toilet paper on her own. These costs truly add up and can make it even harder to put a little extra into the retirement account after a divorce.
Women Need to Be Financially Smart After a Divorce
For many women over 50, divorce represents a new lease on life and an exciting journey into the future. However, it may also mean that they have to adapt to a different lifestyle and pinch pennies a little more. Women who are planning a divorce should always speak with a financial advisor to start planning for transition into single life. Be sure to speak to your financial advisor about your retirement goals and work together to see what you need to do to keep your retirement planning on track.
If at all possible, seek an amicable divorce with your spouse. If you can be civil (even if it’s hard), you are more likely to agree on how to split your assets and avoid costly court battles and sky-high attorney’s fees. (If your divorce is contentious, then check out this article on Six Places to Look for Hidden Assets During Divorce.) Lastly, seek alimony if possible, especially if you left the workforce to care for your kids.
The best way to prepare for your divorce is to attend a Second Saturday Workshop. Find one in your area today!
How Can I get a bilingual legal adviser for divide a retirement account in CalSTRS?
Please, I need help in this matter, we started the QDRO process with my ex husband; but I need urgently know what Method is better and more convenient for me, Segregation Method or Time Rule Formula.
He is trying to manipulate the situation for his convenience because I do not understand totally the English language.
I believe that time rule is most commonly used, but I am not an expert. If you are using a QDRO expert, ask them to recommend someone who can discuss those two methods with you in your native language. Or contact a retirement benefits lawyer and ask them if they can recommend a colleague who speaks your native language.
I have been married for 40 yrs but we separated in 1995. His mother just passed leaving him her home would I be intilted for any of the money from the sale of the house
In most states, property inherited by one spouse is the separate property of that spouse and is not marital property to be divided in divorce.
If there were assets that were not dealt with in the divorce that you have now discovered, you can probably open the case back up to divide those omitted assets. But if you just want a “do-over” because you think you settled for not enough, I can’t imagine that would happen after 30 years. Your next step may be to talk to someone knowledgeable about the laws of your state about what legal rights you have at this point.
Hello I was married for almost ten years and my ex thinks she should get money from my 401k up until I retire .She should only get it up till the time the time divorce was final? She insists she gets it for all the years we were not together and were legally divorced.
Look at your divorce papers to see what she was awarded. That’s what she can get.
I was married for 38 years. He walked out and we are now divorced. We do have a QDRO and I received 50%. I also have been receiving spousal support for 4 years. In the divorce decree it says he has to pay me until I die or remarry. He is planning on retiring and has let me know that he will not be giving me any more spousal support because I have half of the 401K. Is this true? Does spousal support end when he retires even though the divorce decree states that I receive it until I die? I live in Michigan.
I’m sorry, but I’m not an attorney and I’m not familiar with the laws of your state. And he’s not either, so don’t base conclusions on what either of us says. I do know that in many states, a change in circumstances, such as retirement, will trigger a reduction or elimination of support. But if your divorce decree says that you will get paid as long as you are alive and single, and doesn’t talk about a change in circumstances, then I’m guessing he will still owe you after he retires.
Sue G
I’m going through a divorce after 22years of marriage in CA. I am giving my husband $300k for buying out our house. We bought this house for $500k and now it is worth $1,100k. Can I add $300k to house appraisal for property tax when I decide to sell the house later? I’m planning to keep this house at least 10 years after divorce.
The funds you pay your former spouse to buy him out of the house does not add to your tax basis for the house. So when you sell the house your gain will be the sales price less the cost of sale and less the original cost and cost of improvements. The value assessed for property taxes has nothing to do with it.
My husband and I are at the tail end of our divorce in Illinois. I was just told that I was not entitled to 50% of a retirement account because he did not contribute to it during the course of our marriage. 0% Net deposits & withdrawals. It has paid for itself. Is this true? This was an account he has had before our marriage that has grown significantly over the course of our marriage.
In many states, and it sounds as though Illinois may be one of them, separate property brought into the marriage is separate, along with the earnings on that separate property. So if the only funds put into the account were contributed before marriage, the account would all be separate property and not marital property.
I was just at the Social Security office and applied to begin receiving benefits at age 62. I am legally separated from my husband of 20 years. During our marriage he earned in excess of $300,000 for many years. My maximum was $78,000. I ask if I could draw benefits from my husband’s investment over the years since his significantly exceeded mine. And they advised that used to be the case but not anymore. The only way I can ever draw off of his earnings would be if we are still legally married when he passes. Is this correct?
It sounds as though the benefits from your earnings history are greater than the benefits you would get from his earnings history (half of what he would be entitled to). Since the maximum earnings taxed for social security purposes was well under $100,000 for many years, the fact that he earned much more than that doesn’t increase his benefit. When he dies, you can receive benefits based on 100% of what he would be entitled to, and it sounds like that would exceed your own benefit, which makes sense based on what you have said here.
BEEN MARRIED 18 YEARS WE HAVE NO KIDS.MY HUSBAND WANTS A DIVORCE BUT IS TRYING TO RETIRE EARLY HE IS 60,I AM 63 BEFORE THE DIVORCE.HE DONT WANT TO GIVE MA NY OF HIS RETIRERMENT .I HAVE NOT WORKED AT ALL DURING OUR MARRIGE.I AM DIABLED AND UNABLE TO WOK EVER.HE TELLS ME I CAN HAVE ALL THE STUFF IN THE HOUSE AND A CAR BUT NOTHING ELSE.WHEN WE MARRIED I HAD 20,000 FOR MY FIRST DIVORCE SETTLEMENT AND ALL MY HOUSE HOLD STUFF.BEFORE WE MARRIED I BOUGHT WASHER AND FRIGERATOR AND DINNET SET AND MATTRESS AND PUT MONEY DOWN TO RENT TO OWN A HOUSE BUT LOST THAT CAUSE HE MOVED US CLOSER TO HIS JOB.I AM IN A PANIC.I HAVE NO WHERE TO GO LIVE AND IT JUST SCARES ME.I AM FROM OHIO AND WOULD LIKE TO KNOW THE LAW FROM HERE.THANK YOU MARCELLA FOGLE
To find out the law in Ohio, you’ll need to ask someone there who is knowledgeable about the law. But I can tell you this: what he is willing to do and what the law says he must do are two different things. In most states, spouses have a duty to take care of each other, and assets earned during the marriage are usually divided. So he’ll probably have to give you part of his pension. But check with someone there to find out.
Can you advise. I have been married 22 years and am now divorcing my husband. he has not paid any household bills in about 10 years and has been working on a business since then. But now at retirement he wants me to split my retirement . I don’t think its fair he has not supported us and I have a lot of debt that initially I told him I would pay myself he could just walk away.
Would a judge ever look at who gave the most monetarily?
The laws of each state are different. In some states, everything earned and spent during the marriage is considered marital, so it doesn’t matter who made what or spent what. In other states, it may make a difference. Check with an attorney familiar with the laws of your state to see what your state provides.