When people of any age choose to divorce in California, there can be a range of expected and unexpected financial consequences, especially ones related to retirement. These consequences can be particularly significant for people going through a “gray divorce,” which is a term that refers to individuals aged 50 years and older ending their marriages. While the divorce rate for Americans as a whole has flattened and remained stable, the same cannot be said for people in this demographic group. Between 1990 and 2010, the divorce rate for people over 50 years old doubled.
The financial considerations can also be particularly important for people in this age group. For one thing, people who divorce over the age of 50 are closer to retirement, so all of their financial decisions are more directly tied to this period of their lives. In particular, retirement accounts are often the largest single asset divided during a divorce settlement. When people divorce closer to retirement, they have less time to rebuild their accounts as a single worker. However, according to a study by the Center for Retirement Research at Boston College, the effects of divorce on retirement are not limited to those who divorce close to when they stop working.
The study examined working-age Americans’ ability to keep up their current standard of living after retirement. Around half of all people are at risk of being unable to do so, a risk that rose by an average of 7 percent if people had been divorced in the past even if it was at a younger age.
There are a number of reasons for this effect, including the long-term financial expenses of divorce and the extra costs associated with living a single life. A family law attorney can help people going through a divorce plan for the financial impacts of the end of a marriage and work to achieve a fair settlement in terms of property division, spousal support and other issues.