A gray divorce occurs when spouses in their 50s or later end a marriage after years of sharing a home and finances. The spouses are near or even past the age of retirement, which means that the end of the marriage could have devastating financial implications.
Those preparing for a gray divorce can take steps in advance to limit the lasting financial harm caused by the decision to divorce later in life. How can divorcing couples protect themselves from the likely financial strain generated by a gray divorce?
They control costs
One of the most effective ways to minimize the impact of an upcoming grade divorce is to limit litigation expenses. Spouses who settle outside of court often pay far less for their divorce proceedings than couples who rely on judges to settle their disputes about property division and financial support.
They adjust their financial practices
Individuals preparing for gray divorce often need to review their circumstances with a financial advisor to modify their budgets and their investment strategies. They may need to work a few years longer than they planned or seek part-time jobs.
Reworking plans for retirement can be helpful as well. Decreasing travel plans and looking for ways to minimize living expenses, such as taking on roommates or living with family members, can help reduce the likelihood of a gray divorce derailing retirement plans.
As a closing note, spouses may need to be conscientious about how they address retirement savings and pensions, as well as government retirement benefits, to cover their medical costs and supplement their savings. Working with an attorney who is familiar with the nuances of gray divorce can be beneficial for those facing a divorce after years of marriage accordingly.