Getting a divorce is never easy, no matter your age. But if you are over 50 and ending your marriage, you face unique hurdles. A late-life divorce comes with particular challenges to your finances and emotions.
Ending your marriage when you are older can be much more complex because your finances and families are so intertwined. Here are some important things to consider when getting a gray divorce.
Divide the retirement plans properly
The way you split your retirement plans depends on what kind they are. You may need to fill out and file a Qualified Domestic Relations Order if you want to divide retirement funds without anyone incurring fees or taxes. Do not make any withdrawals from retirement plans until you are sure you are following the rules.
Focus on the big picture of assets
When dividing marital assets, it is easy to get stuck on a particular belonging or source of wealth. But there may be plenty of other useful and lucrative things on the table. There is often value in having a mixed portfolio of assets. If you hold onto one specific asset, such as the house, in lieu of others, you may end up with financial hardships down the road. Consider the benefit of taking a percentage of various assets and sharing the risk.
Consider tax implications
Virtually every financial choice you make during your divorce may impact your taxes. Alimony, child support and property division may all have consequences for your tax bill. What may seem like a good decision at first may come back to hurt you when it comes time to pay taxes. Weigh all your options, and do not rush any decisions before thinking about taxes.
Remember your adult children
Of course, divorcing is hard for young kids. But it is still a struggle for adult children too. Focus on maintaining a healthy relationship with your adult kids as you get a divorce.