Although the divorce rate has been going down in the United States for some time, for couples 50 years old and up, it is actually rising. In fact, the rate of divorce in this age group has doubled since 1990. While twenty years ago, grey divorce happened to one in ten spouses, today it impacts one in four.
There are many reasons for this. When the children grow up and leave home, the glue that kept the couple together is no longer there. When people grow older, they also grow as individuals, which can lead them down a different path as they age. There is less stigma to divorce now than in the past, and with more women working, there are fewer practical financial reasons for staying together.
For older spouses considering divorce in Michigan, it is important to have a plan in order to avoid costly mistakes that will put them at financial risk. It will also wise to have reliable and experienced legal support serving the Ann Arbor community that will help you navigate a resolution that protects your assets during property division.
Some financial pitfalls to avoid
Divorcing couples at any age should realize that the cost of living for singles on a per person basis is much high than for couples. But for older spouses, splitting up can destroy retirement savings and put both spouses at risk after divorce.
To protect their financial future, divorcing spouses may want to be aware of common mistakes that can prove costly down the road:
- Make sure to take an accurate inventory of assets, including cash, investments, retirement accounts and life insurance policies, as well as debt.
- Keeping the family home can prove to be a liability for the one who has to shoulder the mortgage and upkeep alone, and selling it can have tax implications as well.
- Not paying attention to the tax consequences of divorce can be a costly mistake. Splitting investment accounts with early withdrawals will have huge tax implications.
- Forgetting about health insurance can be an expensive mistake, especially for a spouse who has been on the other’s insurance policy and before Medicare kicks in age 65. Discussing options during divorce proceedings will ensure that both spouses will be taken care of.
- Underestimating post-divorce expenses can be a big mistake, and so it is crucial to carefully examine all angles in order to keep from coming up short.
Divorce is expensive at any age, but for older people, it can prove devastating. With careful planning, grey divorce does not have to create financial heartbreak for them in the future.