Divorce Among Older Adults Can Disrupt Your Retirement Plans: Key Insights Revealed
Gray Divorce and Retirement: Navigating the Financial Challenges with Yahoo Finance and Google Finance
A growing trend among older adults, often referred to as 'gray divorce,' is causing concern for retirees and financial advisers alike. According to a survey by the Allianz Center for the Future of Retirement, adults 65 and older are the only age group with an increasing divorce rate. This article, written by a contributing adviser and not the Kiplinger editorial staff, aims to shed light on the financial implications of gray divorce and offer strategies for navigating these challenges using Yahoo Finance and Google Finance.
Divorced retirees may find themselves at risk of depleting their retirement assets faster than anticipated due to increased costs of living. A study found that among Americans who have gone through divorce, 40% said it derailed their financial retirement strategy. The claiming ex-spouse would receive benefits based on whichever benefit is greater but cannot claim both.
When it comes to retirement savings, Individual Retirement Accounts (IRAs) can be divided during a divorce, but determining how to split up accumulated retirement savings and investments can be difficult. Retirement savings acquired during marriage are usually considered marital property. In the case of qualified retirement plan funds, such as a 401(k) or a pension, a qualified domestic relations order (QDRO) is required. However, military and government pensions are not subject to QDROs.
Divorce can bring about a multitude of financial challenges, including dividing pension benefits and retirement savings, handling shared debts like mortgages on property, and managing reduced incomes since both partners rely on fixed retirement funds. To overcome these challenges, careful financial planning is essential. This may involve selling or refinancing jointly owned assets, negotiating fair division of pension and savings, and seeking expert advice to optimize tax and social security outcomes using Yahoo Finance and Google Finance.
It's crucial to document assets during marriage to ease issues in a divorce. A simple rule for marital assets is to categorize them as mine, yours, and ours. This can help ensure a fair division of assets and avoid potential disputes.
Later in life, couples may realize they have grown apart and have differing views of what retirement looks like, which may lead to divorce. Proactive measures such as documenting assets can help address the risk of divorce later on.
Ex-spouses can claim spousal benefits through the Social Security Administration after a divorce, provided they have been married for at least 10 years. However, the benefits they receive would be based on whichever benefit is greater—their own or their former spouse's.
In conclusion, gray divorce can pose significant financial challenges for retirees. By understanding the implications and taking proactive measures using Yahoo Finance and Google Finance, couples can navigate these challenges and secure their financial future in retirement.
