Divorce is incredibly common these days. There was a time, no so long ago, when divorce was largely relegated to younger couples. These days, however, it is much more common for older couples to divorce, even after years of marriage. There are many factors that can contribute to later in life divorces, such as empty nest issues, the pressure of re-learning one another after retirement or just growing apart over the years. Some studies indicate that both spouses retiring can increase the chance of divorce.
This trend of divorcing after longer marriages and later in life has played out in popular culture, just as it does in real life every day. For example, Melanie Griffith and Antonio Banderas recently divorced after eighteen years of marriage, while both were nearing the standard retirement age. However, the average couple divorcing in their late 40s, 50s or 60s will not have the financial assets that stars can rely on during divorce. Gray divorce can have a powerful impact on your retirement funds.
Even simpler divorces can cause financial issues
Many couples don't really spend much time thinking about how much they spend, their debt level or the size of their retirement account. However, when you're headed for divorce, you need to consider each of these factors carefully. Unless the debts were older than your marriage, you and your spouse will likely end up splitting them, along with your marital assets, in your divorce.
Retirement accounts can complicate the process of asset division quickly. Washington D.C. family courts strive for an equitable division of assets. Unless there is a prenuptial agreement, all assets accumulated during the marriage will likely end up divided. Regardless of who holds the account or who made more deposits, the courts will probably divide those funds. Chances are, you were planning on enough money to support two people in one household, along with pensions or Social Security income. What results after the split may not be enough for your own retirement.
You have less time to rebuild your financial situation
When people divorce young, they have decades of income-making potential ahead of them. These people can rebuild their finances, including their retirement accounts, before the time comes. When you end up divorcing later in life, you simply have fewer wage-earning years between you and retirement.
That can make rebuilding your retirement fund a more difficult proposition. In many cases, a divorce close to retirement age can mean pushing back your date of retirement to allow for more money making in the interim.
For others, independent retirement may simply not be an option. Increasing rents and real estate prices around Washington D.C. may create a prohibitively expensive situation for one or both spouses after divorce. You may need to consider living with children or other alternative approaches to retirement.