Divorce can be challenging at any age, but for those nearing or already in retirement, the financial and emotional effects can be more complex. When you’re getting close to your golden years, the idea of rebuilding your life post-divorce can feel overwhelming.
If you find yourself in the situation of divorcing after retirement, here are four crucial steps you should take to protect yourself financially and emotionally.
1. Hire a Qualified Attorney
The laws surrounding divorce and retirement accounts vary from state to state, so it’s essential to consult with a seasoned attorney. An experienced lawyer who specializes in both divorce and retirement or pension law will be invaluable in ensuring that your assets, especially retirement funds, are protected.
Even if you and your spouse agree on terms, emotions can shift as the reality of divorce sets in. Your spouse might become less amicable if they realize the financial benefits of divorce, especially if they consult a lawyer first. To avoid surprises, never proceed with divorce without legal guidance, particularly when dealing with decades-old retirement accounts.
2. Reevaluate Your Social Security Benefits
Social Security benefits can play a significant role in a retirement-age divorce. Did you know your spouse may be entitled to half of your Social Security benefits after your passing? Additionally, your spouse may qualify for Social Security spousal benefits even after divorce—provided you were married for over 10 years, they are 62 or older, and they haven’t remarried.
It’s crucial to have your attorney reassess your Social Security benefits before finalizing the divorce to ensure you’re fully informed of any changes that may affect your financial future.
3. Review Key Financial Documents
Don’t wait until after the divorce is finalized to review your important financial documents. Take time now to carefully go over your will, estate plan, and any shared investments or assets. If your spouse is listed as a beneficiary in your will or retirement accounts, this may need to be updated.
Also, check your pension or retirement account documents—most have a spousal benefit clause that could entitle your soon-to-be ex-spouse to a portion of your pension or assets. It’s vital to consult your attorney to ensure everything is reviewed properly before moving forward with the divorce.
4. Determine Who Gets What
Dividing household assets and retirement accounts can be one of the most contentious aspects of a divorce, especially if you’re on a fixed income. Do not assume that your spouse will be agreeable when it comes to dividing assets. Be sure to review your state’s laws regarding asset division and understand how your financial situation may change as a result of the divorce.
Understanding who gets the house, any shared investments, or other valuable assets is essential for planning your next steps and ensuring a fair distribution.
Focus on Your Future
Divorce in retirement can feel like a setback, but it doesn’t have to define the rest of your life. Even if the process is tough, remember that you still have many years to live and experience new things. Whether it’s seeking counseling or focusing on your future goals, take proactive steps to stay positive and plan ahead.
A retirement-age divorce might be challenging, but it can also be an opportunity to create a fresh start and a more fulfilling chapter in your life.
