Gray divorce, or divorce among older adults, can have significant financial implications. However, there are proactive steps people can take to minimize the financial impact of a gray divorce.
By understanding the challenges and implementing strategic approaches, individuals can protect their financial well-being during this transition.
Prioritize financial planning
Financial planning is an important step in any gray divorce. This includes assessing current financial assets, liabilities and retirement accounts. It also involves developing a comprehensive plan for post-divorce finances. Seeking guidance from financial advisors can help individuals make informed decisions and secure their financial future.
Negotiate fair settlements
During divorce proceedings, it is important to negotiate fair settlements that consider both spouses’ financial needs and contributions. This may involve dividing assets equitably, considering factors such as income disparity, earning potential and contributions to marital assets. Divorcing parties should also review and understand the tax implications of asset division to minimize future tax liabilities.
Use retirement accounts
Dividing retirement accounts such as 401(k)s, pensions and IRAs can be complex. Individuals may want to explore options such as qualified domestic relations orders to ensure proper division of retirement assets. Those nearing retirement age may also want to reassess their retirement savings goals and adjust their plans to account for the divorce’s impact on their financial future.
Explore employment opportunities
For those who may be reentering the workforce or transitioning to a new career post-divorce, finding employment can reduce the financial impact of a gray divorce. Updating skills, networking and seeking out job training programs can improve employment prospects and financial stability in the long term.
USA Today reports that the divorce rate among those 55 and older doubled since 1990. It also tripled among those 65 and over. Gray divorce creates financial challenges, but taking proactive steps now can pave the way for a more stable and secure financial future post-divorce.