A rising number of couples in California and across the nation are filing for divorce later in life. The developing phenomenon, known as ‘gray divorce,’ has swept the nation as more and more people over the age of 50 have decided to terminate their marriages.
According to researchers at Bowling Green University, one in ten people filed for gray divorce in 1990, growing to one in four by 2015, according to Thrive Global. If you are over the age of 50 and have decided to file for divorce, you may have concerns about the financial security of your future.
What should you consider?
If you have been married for an extended period of time, you and your spouse may have created a retirement plan based on your incomes. Terminating the marriage can have a significant impact on these plans. It is critical to consider the following areas before your settlement is finalized:
- Healthcare insurance
- Division of assets
- 401k plans, retirement plans, stock options and Social Security payments
- Term life insurance policies
- Tax consequences
Since California is a community property state, you are entitled to half of all property and assets accumulated during the marriage. Keep in mind that early withdrawal of 401k plans and retirement funds may constitute a penalty, which can take some of the money.
What are the costs of separate living?
More women are financially independent than were decades ago, making the financial aspect of the split easier for some. You may have your own insurance policies, income and savings. Yet, if you do not, you may be forced back to work in order to make ends meet. Affording a mortgage, rent payments, insurance, gas, food and other expenses can be daunting for some. Going back to work can help manage those new financial challenges.