Divorce rates have flattened or dropped among most age groups. But people ages 50 and above were twice as likely to go through a divorce in 2014 than they were in 1990, according to the National Center for Family and Marriage Research at Bowling Green State University in Ohio.
If you are embarking on a new single life and you're over 50, there are special financial concerns, said Angie O'Leary, senior vice president of wealth management at U.S. Bank. “We recommend very good planning.”
Here are some of the common issues that come up, especially for women:
Divorce often brings up the question of whether to stay in the family home or sell it.
“Sometimes women want to keep the house where the kids grew up, because (of an) emotional attachment,” O'Leary said. They often trade it for cash in a divorce settlement.
But realistic maintenance costs and taxes have to be factored in to determine if that's truly a fair deal for the spouse who's staying put.
Also, O'Leary observes, in many areas of the country, big suburban-style homes are not appreciating significantly because cash-strapped millennials are not in the market for them.
You don't want that cozy shrine of memories to turn into a white elephant.
If one spouse has worked longer outside the home, retirement savings are considered part of a fair split. Liquidating a 401(k) or IRA in order to distribute it between spouses would create an unwanted taxable event.
To get around that, courts can issue a “QDRO” or “qualified domestic relations order” that indicates what share of the assets should be transferred to a spouse's name. But certain kinds of pensions, such as military or police pensions, are very difficult to divide in this way.
Again, a former homemaker who is going to get alimony may also seek a court order compelling the ex-spouse to maintain life insurance with the alimony recipient as the beneficiary.
Someone who was married at least 10 years and hasn't been working has the right to spousal Social Security benefits. But she cannot collect these benefits on her ex-spouse's record until she has been divorced at least two years, and she can't keep collecting them if she remarries. (See the Social Security Administration's website for more details.)
There are many pitfalls here and details to discuss. Divorcing partners, with two households to maintain, may newly disagree over whether to continue paying Junior's college tuition, even if they did so for his older sister. Selling the house may not be possible if boomerang kids are living at home. Plus, if one partner remarries and has more children, what will happen to the will?
O'Leary recommends calling in a financial planner as soon as possible to go over various scenarios and the income tax implications of each one. If you haven't done detailed estate planning, now is the time.
Re-entering the workforce
At the age of 50, women enjoy a life expectancy of 33 years, which is plenty of time to train for and re-enter the workforce.
Retirement savings are a factor that needs to be considered in any decision about returning to work. O'Leary recommends getting a financial adviser in place right away.
Anya Kamenetz' most recent book is “The Test: Why Our Schools Are Obsessed with Standardized Testing, but You Don't Have to Be.” She welcomes your questions at email@example.com