Gray Divorce

Gray Divorce:  Increasing at an alarming rate.

Lincoln County has seen an influx of residents over the age of 50.  Whether its the influx of communities centered at retirees, the desire to be closer to grandchildren, or lower North Carolina taxes, many individuals are relocating to our great county.

With that, gray divorce has been increasing at an alarming rate.  Sociologist estimate that people over 55 are divorcing at rates almost double to their counter parts in the 1970’s and 1980’s.  Gray divorce has special considerations that are not seen when someone divorces earlier in life.

Gray Divorce and Alimony:

Alimony in North Carolina takes into account the incomes of the parties, their reasonable needs, expenses, and the length of the marriage.  Unfortunately, gray divorce often occurs when parties are expecting to retire.  Sometimes, the wife has stayed home for most of the marriage and will have a difficult time entering the work force.  Often, the parties have based retirement planning to support one household verses the two households they now face.

Women often fare worse financially after a gray divorce.  Whether its due to staying at home, saving less for retirement, or that fact that women live longer then men, alimony may be the difference between spending your retirement years in poverty for both parties.

Gray Divorce Considerations:

  • Retirement information.  It is crucial to gather all retirement information for you and your spouse.  Create an account with Social Security to order an updated estimate of retirement benefits.
  • Meet with a financial advisor.  I often refer my clients over 50 to a financial advisor to work on a budget, review savings, pensions, and retirement accounts.  That is the best way to get on a firm financial footing.
  • Drawing on your spouse’s social security benefits.  Often, we see gray divorcees that have not worked enough credits to qualify for social security on their own.  There are special rules regarding the length of a marriage for an ineligible spouse to qualify for benefits under the working spouse.
  • Survivor Benefit Plan.  If there is a pension, can the spouse elect to have benefits continue through a Survivor Benefit Plan by taking a reduced amount of pension now, but benefits continue in the event the Pension earning spouse predeceased the pension dependent spouse.  There are benefits and disadvantages to this method.
  • Life Insurance.  Life insurance is an important negotiation point for a dependent spouse during a gray divorce and something that should be negotiated.
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