Ending a marriage after 50 brings unique financial challenges, especially in an expensive state like New York. While younger couples still have years to rebuild their wealth, divorcing later in life leaves you less time to recover financially.
Even if you live comfortably now, future medical and long-term care expenses can quickly drain your retirement savings. Below are three tips to help you financially prepare for a gray divorce.
Evaluate your complete financial picture
Before diving into divorce negotiations, you need a clear view of all marital assets and debts. Gather all your recent statements for retirement accounts, investments, properties, insurance policies and credit cards.
Look for assets you might have forgotten about. Examples include old 401(k)s from your previous employers or inherited property. A thorough review helps you get a fair asset division.
Plan your retirement income strategy
Creating a detailed post-divorce budget helps determine if you need to adjust your retirement plans. Think about the following:
- How splitting pension or retirement accounts affect your retirement timeline
- Whether you qualify for spousal Social Security benefits
- Any tax implications or penalties for liquidating retirement assets
- How much of your retirement savings you can comfortably share
Additionally, planning ahead can help you figure out if you need to request more alimony or argue for lower spousal support if you’re the one paying it.
Protect your health insurance coverage
Many spouses rely on health insurance through their partner’s employer plan. So, it’s crucial to research alternative coverage options before finalizing your divorce. Look into:
- Medicare and Medicaid eligibility and enrollment deadlines
- COBRA continuation coverage costs
- Private insurance marketplace plans
- Long-term care insurance policies
Remember, proper health coverage can help prevent medical bills from depleting your retirement savings.
Securing your financial future post-divorce
Careful preparation for asset division might be stressful, but it can help protect your financial security. It helps to work with professionals who understand the challenges of a gray divorce.
An experienced attorney can help you properly value and divide your assets, including your retirement savings. With thoughtful planning, you can create a stable foundation for your retirement years and maintain your quality of life.