A late life divorce includes many of the same challenges as a divorce when you are younger. However, older couples also face some unique, age-related issues as well, including health concerns, retirement, and greater emotional impact. One of the biggest differences in late-life divorce is the fact that you will have less time to recover financially afterward. If you are getting a divorce after 50, or are considering it, it is important to consider division of assets like your home, retirement plan, and Social Security
When dividing assets in late life divorce,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 since your age allows you to be eligible for real estate property tax exemptions. Your house could also be a more valuable asset since you could be eligible for a reverse mortgage once you are 62 years old, which could offer additional income. As you grow older you might want your house for tax benefits such as mortgage interest or exclusions from gains upon sale. The house might also be a more valuable asset to you since the house owner can qualify for public benefits such as Medicaid, and have access to equity and potential rent income.
Another issue to consider in late life divorce is dividing retirement plans. Dividing retirement plans can be complicated, so 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.
Some things you might want to go over with your lawyer include:
- 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 factors you should know about the benefits after late-life divorce. First of all, if you had been married for at least 10 years and you are 62 years or older, you can collect up to 50 percent of retirement benefits from your spouse’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.
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. Also, if your ex spouse dies, you could be eligible for survivor benefits that include 100 percent of your former spouse’s Social Security benefit. To qualify for those benefits, you must have been married for at least 10 years, be at least 60 years of age, and you must not be entitled to retirement benefits that are of equal or greater value to your spouse’s benefits.
For more information on Social Security and you and your spouse’s Statement Earnings, visit the website for the Social Security Administration.