Getting a divorce late in life usually has the same causes as an early divorce, whether it be regrets, infidelity, or a desire for independence. While a divorce after 50 faces many of the same issues as a divorce when you are younger, older couples also face some unique, age-related issues as well, such as health concerns, retirement, and greater emotional impact. One of the biggest factors to consider is the fact that you will have less time to recover financially after a divorce later in life. If you are getting a divorce after 50, or are considering it, first consider division of assets like your home, retirement plan, and Social Security.
When dividing assets, it is important to remember that there is more to consider than just the market value of the asset; some assets will be more useful to you later in life than they are now, such as your house. Your house could be of greater value to you at an older age for a variety of reasons. First of all, your age allows you to be eligible for real estate property tax exemptions. You could also be eligible for a reverse mortgage once you are 62 years old, which could offer additional income. In later years, you might want your house for tax benefits including mortgage interest and exclusions from gains upon sale. An older divorcee might also want to be the owner of the house so they could qualify for public benefits such as Medicaid, and have access to equity and potential rent income.
Dividing retirement plans can be difficult, and it is important to consult with your lawyer. You may need a Qualified Domestic Relations Order, which is a separate court order used for division of retirement benefits. If your spouse has military benefits and you are a civilian, your rights are protected under the Survivor Benefit Plan. Before making any decision about retirement plan divisions, get a copy of the Summary Plan
Description from the retirement plan administrator.There are several factors you will need to go over with your lawyer, including:
- eligibility for survivor benefits (even after divorce)
- whether you can get a hardship withdrawal
- eligibility for tax penalties and distributions
- whether your spouse has any loans to repay in regards to a 401(k) plan
- whether or not you will have access to retirement plan contributions
Though Social Security benefits are not divisible assets, there are still a few things you should know about the benefits after divorce. First of all, if you had been married for at least 10 years and you are 62 or older, you can collect up to 50 percent of retirement benefits from your ex’s Social Security record without reducing their benefits. Once you’ve been divorced for 2 years, you can get benefits from your spouse even if your spouse is not yet receiving benefits. Also, if you are 62 years old and receiving your on benefits or your spouse’s benefits, you can switch to the other account when you reach full retirement age.