The Wall Street Journal recently reported on a divorce boom among the over-50 crowd. “Gray divorce” is on the increase in spite of an overall trend of lower divorce rates. Although the WSJ’s article was exploring why this trend is happening, we’d like to point out that there are some unique factors in later-life divorce that might make a difference in how you go about a post-50 split.
Divorce may affect your retirement and it is important for you to understand New Jersey’s equitable distribution rules as they apply to company pensions, 401-ks, and other retirement plans. Particularly if you’re in your early 60s, splitting from your spouse may mean that your retirement funds don’t go as far — after all, once your joint assets are divided, you’ll have less to draw on.
- Consider: Sitting down with a financial planner to create a new retirement plan based on only those assets you know you’ll keep (that is, assets that are not jointly held). You may need to delay retirement for a few years until you’re sure you have what you need to live comfortably.
- And don’t forget… Your will, your IRA, your Social Security account, and any life insurance policies you may have all should be reviewed to make sure they name appropriate beneficiaries. If you have children, then you should make sure that your kids are named as beneficiaries rather than your spouse. If not, it’s OK to name your ex-spouse if your split was amicable; otherwise, you can name a friend or another relative. (And if you haven’t written a will yet — NOW is the time!)
Divorce may affect your children’s college prospects. Most people in their 50s and 60s do not have young children, although some may have a child in high school. If your kids are in college or high school, it may make child custody less of a problem, but you’ll need to negotiate who pays for college after the divorce.
- Consider: Placing assets into a separate trust created by you and your spouse to pay for your child’s college costs before you file divorce papers.
- And don’t forget… There are thousands of scholarships available, many of which go untapped because few applicants know about them. Do your research and help your son or daughter find and apply for these scholarships!
Divorce may affect your health. It’s very easy to let health slide in the turmoil and strain of the split. But healthcare expenses for a single person over 50 tend to be greater than for a married couple or family, so it’s worth taking a little time to plan out how you’re going to manage your health (this is particularly important if health issues in your household were formerly handled by your spouse).
- Consider: Working with a nutritionist or lifestyle coach to start new, healthy eating and exercise habits once you’re on your own.
- And don’t forget… You should also make a concrete plan to stay socially active — because social interactions are a key component of long-term health. Whether that means joining a club for people with similar interests or even just meeting with friends for dinner once a week, it’s important to restructure your social life now that you’re no longer part of a couple.