Gray divorce has been on the rise even while divorce rates among younger groups have declined. Older adults in their 50s and beyond are now more likely to divorce than most other age groups. However, those who have remained married for decades often have much to lose during the divorce process.
They may have planned for retirement while expecting to share one another’s resources and combine their basic living expenses. Some people worry that pursuing a gray divorce might effectively cut them off from their dreams of retirement.
Is it possible for older spouses to retire comfortably after completing a gray divorce?
Spouses share retirement resources
People frequently point to an imbalance in retirement savings as a warning sign that gray divorce could be devastating. Maybe their spouse accrued a pension by working for the same company for years, but they only maintained part-time jobs because they stayed home to raise the family’s children.
Retirement savings and pensions acquired during the marriage are usually part of the marital estate. They are subject to division, meaning that lower-earning spouses can receive a portion of a pension or a retirement account if they do not have their own resources. Dividing the marital estate can leave each spouse with the assets they require for financial stability later in life.
Benefits may still be accessible as well
Many retired adults rely on two key forms of government benefits to support themselves during their golden years. They use Medicare health insurance for basic medical needs and Social Security retirement benefits to augment their savings. Provided that the marriage lasted for at least 10 years, dependent or lower-earning spouses may still be eligible for Medicare and Social Security retirement benefits.
Lower-earning or dependent spouses can apply for Medicare based on the employment history of a wage-earning spouse. They can also qualify for Social Security retirement benefits based on what the wage-earning spouse earned.
Lower-earning spouses can supplement their personal Social Security benefits based on what their spouses earned or can qualify for Social Security retirement benefits when they otherwise could not based on the employment history of their spouse. The retirement benefit claims of lower-earning or dependent spouses do not affect what the other spouse receives.
Understanding what happens with key resources in a gray divorce can help people feel confident about the future. Staying in an unhappy marriage is not the only way to retire.