How to Approach “Grey Divorce”
Divorce after the age of 50 is more and more common. And so is the fact that divorce after age 50 can be financially devastating, especially if you’re close to planned retirement. Divorces like this are also referred to as “Grey Divorce.”
As a couple you’ve saved a retirement nest egg and have assumed that your golden years would be spent together. Now those same funds will have to support two households. Experts estimate that post-divorce expenses are anywhere from 30-50% more than if you stay together. Your marital retirement savings must now fund two of everything: Two homes, two cars, separate vacations, separate trips to see the grandchildren, etc. This duplication can quickly eat into a retirement fund.
If divorce after age 50 happens to you, minimize the damage by being as cooperative with your spouse as possible. Prepare yourself, get your documents in order. Most importantly, to minimize the financial toll, be sure to hire a financial advisor along with an attorney or mediator. And consider the collaborative or mediation process.
With the children more than likely being adults, the main devastation of a grey divorce will be the finances and your emotions. Certified Divorce Financial Analysts® (CDFA®) are trained in the area of divorce financial settlements and can help you make sure you are covering all of the key issues. They can help you clarify whether you should keep the house, if spousal maintenance is necessary, and how to split the pension. It’s worth the investment to add a CDFA® to your team.
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Andrew Hatherley is NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL ADVICE. All information he provides is financial in nature and should not be construed or relied upon as legal or tax advice. Individuals seeking legal or tax advice should solicit the counsel of competent legal or tax professionals knowledgeable about the divorce laws in their own geographical areas. Divorce planning is a fee-only process that does not involve investment advice or securities or insurance transactions.