Divorce is a hard thing to go through at any age, but it can be incredibly difficult for those ending their marriage later in life. Gray divorce – or a divorce over the age of 50 – usually means more assets and wealth to divide due to years or even decades of marriage. What’s more, is individuals who divorce later in life have a more challenging time recovering from the financial setback since they have less time to earn it back in the workforce.
If you are considering a gray divorce, you must prepare for its impact on your financial well-being. Here are a few steps you can take to ensure you start your next chapter off on the right foot:
Assess your income
After divorce, you’ll likely become a single income household with less money to cover your monthly expenses or save for retirement. Unfortunately, this could mean that you’ll have to adjust to a lower standard of living or less comfortable retirement than you had planned. Take the time to evaluate what you can afford to live on after your divorce and whether you need to change your lifestyle.
Determine if you need health insurance
Many people forget that if they’re on their spouse’s health insurance plan, they’ll need to secure their coverage after divorce. Medicare isn’t available to individuals unless they are over the age of 65. If you are under the age of 65 and don’t have health insurance, be sure to factor in the cost of coverage to your new budget.
Evaluate your assets
Before you determine how you’ll divide your assets in a divorce, you’ll need to take inventory of what you have together. You’ll want to consider investments such as:
- Bank accounts
- Social Security benefits
- Retirement accounts
- Pension plans
- Real estate
- Life insurance policies
When creating your inventory, be sure to include both the current value of these assets and their potential future value as you age.
Regardless of age, divorce can take a tremendous toll on a person’s emotional and financial well-being. However, by following these steps, you can avoid a gray divorce’s common pitfalls and look forward to the next phase of your life.
