When older couples
divorce while the financial issues may be similar to younger couples they are
also different. Yes,
assets must still be divided and
spousal support must be considered but there are additional concerns that are on the forefront
of clients' minds.
The biggest concern for "graying" divorcing couples is the ability
to remain self-supporting as retirement approaches or has already occurred.
A recent New York Times article expressed that there has been an increase
in the number of couples divorcing after their children are independent.
Because the clients are getting ready to or are already retired the financial
issues become even more important because the ability to continue to earn
is ending within 10 years or has already ended. Any financial planner
will advise that financial decisions that are made in the last 10 years
of a work career will have substantial effect on future financial security.
It is well known that the longer a person works before collecting social
security the greater their monthly benefit will be and the more money
they will have for retirement. By deferring retirement a person will also
continue to earn, possibly save and increase their social security benefit.
When people divorce later in life assumptions are made as to how long a
person will continue to earn. If there is a
pension benefit to share, the employed spouse is often in control of when retirement commences
and when the former spouse will begin to receive a share of the pension.
maintenance can bridge the gap many judges will not expect a person to work beyond
age 62, 65 or "full social security age". What happens if the
working spouse cannot work as long as expected, or is laid off as part
of downsizing or other corporate changes? What happens if the person becomes
disabled prior to retirement? Just as the non-working spouse is calculating
income, the working spouse is also making assumptions as to how long they
need to work knowing that they will be sharing a substantial portion of
The bottom line is that for divorcing older couples there are less opportunities
to change or correct for mistakes, faulty assumptions, poor investment
decisions and other unexpected events. Probably the best advice is to
be conservative in your assumptions as to what the future will bring and
to remain employed or seek employment as long as possible to help remove
as much uncertainty as possible.
Careful consideration of these issues with your divorce attorney and a
financial planner or your accountant will be critical in approaching resolution
of your divorce.