Retirement planning and housing issues in gray divorces

two elders going on a hike
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A Pew Research Center study reveals that the divorce rate among couples who are 50 years of age or older has doubled since 1990. Retirement income and housing security are often the most pressing issues when older couples choose to end their marriages, and spouses who go into these negotiations unprepared can find themselves at a significant disadvantage.

The rules dealing with Social Security benefits, IRAs, and savings placed into 401(k) accounts are complex, and older California spouses may be wise to gather as much information as they can before entering property division negotiations.

Spouses may wish to delay their divorces if they have been married for less than 10 years. This is because waiting until 10 years have passed will allow them to claim Social Security benefits based on their husband or wife’s earnings history. Failing to wait can cast a long financial shado,w as divorcees who were married for 10 years or longer are eligible to receive half of their former spouse’s benefit amount when they reach full retirement age.

Older divorced spouses often wish to remain in the homes that they have lived in for decades, but maintaining a large property on a limited income can be a huge financial burden. A reverse mortgage is one way to address this issue. Monthly payments are not required with a reverse mortgage, but accumulated interest must be paid when the property is sold. Reverse mortgages also allow retired divorcees to access the equity in their homes, which can factor into property division negotiations.

Experienced family law attorneys may study IRA and retirement account documents closely when representing older clients in divorce negotiations. These are often significant assets, and dividing them involves drafting what is known as a qualified domestic relations order.

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