Gray divorce affects older couples, many of whom have been married for decades. While divorce rates have generally been on the decline, they have been on the rise for couples aged 50 and older, according to Kiplinger.
Going into your retirement years with a vastly different financial outlook is intimidating. Fortunately, there are steps you can take during divorce to safeguard your assets and your financial future during your golden years. The most important thing you can do is curb spending during the time leading up to the divorce. Buying a new home or vehicle may be cathartic, but you must ensure you have enough retirement income to cover new expenses.
Make copies of important documents
You should establish a clear picture of your finances going into divorce. Make copies of documents stating ownership of vehicles and other property. Get bank statements showing any accounts solely in your name. You will also need tax returns, insurance paperwork, credit card statements, and any other documents dealing with your finances.
Figure out life insurance policies
Life insurance policies are major assets that must be protected during divorce. If you are the policyholder, make sure your beneficiary designations are in order. If you are not the policyholder, you may still be able to use life insurance to boost your income. This is usually the case when one person earns less than their ex-spouse, in which case you may be able to take out a policy on the person.
Increase your income during retirement
If your former spouse receives a pension at retirement, you may be eligible to a portion of the proceeds. Pensions are often considered marital property (unless the spouse received all or a portion of the pension prior to the marriage). Social Security benefits are more complicated. While not considered marital property, it is possible to receive a portion of your ex-spouse’s benefits under certain conditions, i.e. if you are not remarried and are age 62 or older.