There was once a time when people assumed that those who remained married for the first few years after a wedding would likely stay married for the rest of their lives. However, divorces later in life and after decades of marriage have become more common in recent years. What people call gray divorces involve spouses who are 50 years of age or older deciding to move on from a marriage that no longer suits their needs. Divorcing later in life often has many unique challenges, not the least of which are issues related to finances during retirement.
Whether someone was the main wage earner for their family or a stay-at-home parent, they will likely worry about what their divorce will mean for their comfort during their golden years. What kind of support will be available for those divorcing near or during their retirement years?
Retirement savings and pensions
Most couples will end up dividing at least a portion of the retirement savings put aside during the marriage or the pension benefits accrued during the relationship. Such benefits and savings are usually marital property even if they are only held in the name of one spouse. Therefore, dividing the retirement savings or pension is possible, or someone can ask for their share of those benefits in the form of other marital resources, like equity in the marital home. Sometimes, spouses can ask for spousal maintenance as a way of sharing pension benefits.
Social Security benefits
Throughout people’s working adulthood, they will contribute to the Social Security program. Those contributions then help fund retirement benefits once someone is old enough to qualify. Social Security retirement benefits are available to dependent spouses who did not work for long enough to qualify for their own Social Security benefits even after a divorce. A spouse who earned less could also claim benefits based on the higher-earning spouse’s income. Such claims made by a dependent or lower-earning spouse will not reduce the benefits received by the spouse who earned better wages during the marriage.
Understanding what resources someone may have available to them after a gray divorce may make them feel more comfortable about making a change that they believe will lead to a happier and healthier retirement.