As people live longer, healthier lives, retirement has become a whole new adventure for many. For some married couples, retirement is an opportunity to rediscover the relationship. Others realize they do not wish to spend their retirement years with someone they no longer love.
According to the Pew Research Center, twice as many couples over the age of 50 in the United States are getting divorced today than in the 1990s. This trend, known as “gray divorce,” presents unique challenges.
Some people view divorce after 50 as more straightforward than divorce for younger couples, since they are less likely to have child custody issues. But, there are vital issues to consider when it comes to retirement assets.
In Illinois, all money and property acquired during the marriage are divided equitably in divorce. For couples nearing or in retirement, there are often more significant assets at stake, including:
- Real estate
- Bank accounts
- Retirement accounts
- Social Security benefits
- Pension funds
Those considering divorce near retirement age must prepare for the possibility of losing at least some of their retirement funds.
Think carefully about what assets you need
Deciding who will get the marital home often takes center stage in gray divorce. Since Illinois courts divide assets equitably, rather than a straight 50/50 split, one spouse might wish to keep the marital home in exchange for giving up access to retirement assets. But, if their time left in the workforce is growing short, this might be a mistake.
With less time to re-build retirement funds, the person who keeps the house can find themselves having to work much longer than they’d like. Divorce after age 50 requires careful consideration of priorities, earning potential and desired lifestyle.
Going through a divorce is never easy. And for couples divorcing near retirement, financial issues come to the forefront. By considering the impact on retirement funds and other property, you can be better prepared for the next stage of your life.