A Divorce Later in life Can Ruin the Best-Laid Retirement Plans

A Divorce Later in Life Can Ruin The Best-Laid Retirement Plans

Given that the current divorce rate for first-time marriages hovers at around 50 percent, the outlook is good that we know someone who is divorced or who is thinking about it. The rate for subsequent marriages is even higher, with about 70 percent of them ending. These figures aren’t exactly shocking, but they may be greater than most people realize.

Something not nearly as common knowledge is the fact that the divorce rate for couples in their 50s and 60s has doubled since the 1990s. In the past, once a couple had hit a certain number of years together (more than 25-30, usually), they were considered somewhat “divorce-proof.” Most people assumed that if you’d been together that long, you were pretty much going to be together for life.

That simply isn’t the case these days. Longer life spans, earlier retirement, more financial independence amongst women, and an increased emphasis on self-satisfaction than in prior years are all at least partially responsible for the boom in divorces that occur later in life.

The impact of a divorce later in life

The divorces of older couples and younger ones usually couldn’t be more different. Whereas a younger couple may find that child custody, visitation and support are the key issues in their divorce, older couples (who probably do not have minor children in the home) are likely more concerned with property division, alimony and retirement assets.

A potentially unforeseen consequence of a divorce that occurs later in life is the havoc it can wreak on even the best-laid retirement plans. Let’s say for argument’s sake that Mary and Joe decide to divorce after 30 years of marriage. They married later in life, and are now both in their 60s. Each plan to retire in the next few years.

Texas’ marital property laws say that all assets purchased or acquired during the marriage are presumed to belong to the community estate of the parties, which is subject to a just and right division upon divorce. Trying to split retirement assets while still being able to finance two separate households can leave a significant shortfall for both spouses. With longer life spans comes the potential for more costly health difficulties, the need for an even bigger nest egg, and the high costs associated with long-term residential care (like a nursing home) in just a few years’ time.

One or both of these spouses might, because of the decision to divorce, end up putting their retirement plans on hold for a few years to help offset the costs associated with the split. Do you have questions about how a divorce that occurs later in life might affect your retirement plans, either in the immediate future or years later? Reach out to an experienced family law attorney to learn more about your legal rights and options when divorce is on the proverbial table. Call the Dallas law office of The Webb Family Law Firm, P.C. today at (214) 871-2730, or [email protected] them to schedule a consultation.