Broker Check

Divorce After 50 and Your Retirement

April 04, 2023

As noted by Cooper Trachtenberg Law Group, LLC, a suburban Chicago divorce and family law and real estate law firm, in 2022, the divorce rate in America was 2.3 per 1000, which is a decline compared to previous decades, especially between 1960 and 1990. Contrary to experts’ predictions, the divorce rate in America fell by 12% during the COVID-19 pandemic.

The divorce rate among couples aged 25-39 is 24 per 1000 persons. Older couples divorce less frequently – there are 21 divorces per 1000 persons among adults between 40-49 years of age, while the divorce rate for couples older than 50 is 10 per 1000 adults.

Some of the factors that may contribute to divorce after 50 include:

  • Empty nest syndrome: Once children have left home, couples may find that they no longer have as much in common or that their goals and interests have diverged.
  • Financial concerns: As couples near retirement age, financial concerns may become more pressing, and disagreements over finances may lead to divorce.
  • Infidelity: While infidelity can occur at any age, it may be more common in couples who have been married for a long time and have grown apart.
  • Longer lifespans: As life expectancies continue to increase, some individuals may feel they have more time to start over and pursue new relationships.

Divorce at a later age can have significant financial implications. For example, retirement savings may be impacted, and individuals may need to reassess their retirement plans.  Here are some potential impacts:

  • Division of assets: In a divorce, retirement savings accounts, such as 401(k) plans or IRAs, are often considered marital assets and may be divided between the spouses. This can reduce the retirement savings of both spouses.
  • Alimony and spousal support: In some cases, one spouse may be required to pay alimony or spousal support to the other after a divorce. This can further reduce the retirement savings of the paying spouse.
  • Delayed retirement: If retirement savings are significantly reduced due to divorce, one or both spouses may need to delay retirement or work longer than planned to rebuild their savings.
  • Changes in living expenses: After a divorce, both spouses may need to adjust their living expenses, which can impact retirement savings. For example, one spouse may need to downsize their home or adjust their budget to accommodate living expenses on a single income.
  • Social Security benefits: If a divorced spouse was married for at least ten years and is not currently married, they may be eligible to receive Social Security benefits based on their ex-spouse's earnings record. However, if the ex-spouse remarries, this eligibility may end.

Overall, divorce later in life can significantly impact retirement savings for both spouses. It's important for individuals to work with a financial planner to assess their retirement savings and develop a plan to rebuild their savings if necessary.