Older Americans and Divorce
Divorce on the rise among older Americans
As baby boomers enter their later years, instances of "gray divorce", or divorce among those over the age of 50, are becoming increasingly common. Older Americans and divorce be more challenging for former spouses since retirement savings are close to being converted to retirement income and often one spouse has not worked for many years.
Gray divorce on the rise
The National Center for Family and Marriage Research has found that the number of divorces among older Americans has risen over the past two decades. In 1990, less than 10 percent of divorces occurred between spouses over the age of 50. Now, 25 percent of divorces are between those over 50.
Gray divorce often occurs when a couple has been married for many years and the children are grown and have moved out of the family home. Divorce among older couples can be especially difficult emotionally and financially because a spouse's sense of identity may be tied to his or her partner. In addition, one spouse may have been counting on a partner's retirement savings. Gray divorce, like any divorce, is a major life change.
How gray divorce affects finances
Gray divorce takes its toll on the finances of both spouses. The division of assets leaves spouses with some savings, but less than they would have enjoyed as a couple. This may lead to significant changes in an individual's budget for living expenses. Sometimes, these circumstances force former spouses to dip into retirement savings to make ends meet.
When older couples divorce, it is frequently the case that one spouse has not worked in many years. In these circumstances, family court judges may require the income-earning spouse to pay maintenance to the non-income earning spouse. Maintenance is usually a temporary measure to help the non-earning spouse to get on his or her feet following divorce.
Divorce and Social Security benefits
Divorce can also affect Social Security benefits. Though a family court cannot divide Social Security during divorce proceedings, it is possible for individuals to collect Social Security under their ex-spouse's benefits under certain conditions. Spouses who were married at least 10 years and are 62 or more years old may be eligible for a portion of their former partner's benefits. This does not reduce that individual's benefits.
Likewise, former spouses who were married at least 10 years and are 60 or more years old can receive 100 percent of Social Security death benefits when their former partner passes on, except if they are entitled to benefits equal to or greater than the death benefit.
QDROs and gray divorce
In gray divorce, it is important that spouses protect their share of the couple's retirement income. One of the best ways to do so is to establish a Qualified Domestic Relations Order, or QDRO. A QDRO affirms an individual's right to a portion of his or her former spouse's retirement benefits. While QDROs may be included in the divorce decree, it is also possible for a QDRO to stand alone as its own judgment.
A QDRO must include the name and address of the former spouse, the names and value of the retirement assets and a period of time or number of payments to which the QDRO applies.