Surviving a Gray Divorce - Part 2
While divorce at any age is difficult, divorcing later in life is qualitatively different than divorcing earlier in life. The reason is simple: finite resources.
When you are older you have a limited amount of time, money, and energy to recoup whatever you lose in your divorce.
When you get divorced in your 50’s, 60's, and beyond, you no longer have decades to rebuild your finances or your life. You may already be retired and your income may be fixed. Or you may have been hoping to retire soon. Either way, your career has likely peaked and your income is probably not going to go up in any serious way.
Last week we looked at 4 critical areas you must understand when you divorce later in life. Here are 4 more.
5. Health Care. The older you get, the more important health insurance and health care in general, becomes. Unfortunately, the older you get the more expensive it is to buy that health insurance!
Unless you are 65 and are covered by Medicare, you need to find some kind of health insurance after divorce that fits into your budget. (Even if you are covered by Medicare, you may need supplemental health insurance as well!)
The mistake many people make is that they don’t investigate their health insurance options until their divorce is almost done. They assume that they can get COBRA coverage at the same price as what their spouse is currently paying for his/her insurance.
When they discover that’s not true, and they find out that their health insurance premiums are going to cost more than their mortgage, their entire divorce settlement gets turned upside down.
What’s even worse is not investigating the cost of health care until AFTER you’re divorced! By that time, the die is cast. You need to find your own health insurans AND you need to apply for it within 60 days after your divorce is final.
That’s why it’s so important if you’re divorcing later in life that you work with a good health insurance broker as soon as possible. That broker can help you find and understand your options …and keep you from tearing your hair out in frustration!
6. Retirement. Getting a divorce after 50 can throw a giant monkey wrench into your retirement plans. Even if you scrimped and scraped so that you had enough money to retire at 60, getting a divorce can change everything.
In the best case, you will only lose half of your retirement accounts. In the worst case, you could lose more.
So the first thing you have to realize if you’re getting a divorce later in life is that you might not be able to retire as soon as you thought you would. Or, you may not be able to retire at all. (Yes. Ouch!)
In order to figure out your retirement options, it helps to work with a GOOD divorce financial planner. S/he can run projections showing you how long your retirement money is likely to last. S/he can also tell you how long you have to work before you can start drawing on your retirement money.
Finally, as with health insurance, it’s important to get complete financial information BEFORE you finalize your divorce. That way you can adjust your negotiations based upon a realistic picture of your financial future.
7. Big Expenses (a/k/a Money Suckers). If you are going to have to live on a budget after your divorce, you need to eliminate as many large, unexpected expenses as you can before your divorce is final.
Sadly, the two things that cause the most large, unexpected expenses tend to be two things people love very much: their house and their adult children. While you can continue to love both after your divorce, you may not be able to continue to support either.
Although most people think of their house as an investment, it is also a liability. Not only do you have to pay the mortgage, taxes, and insurance to keep it, but you also have to pay for maintenance and repairs. All of that can send your budget into a tailspin.
As much as you may love your house, selling it before you’re divorced can may make a lot of financial sense. That way you and your spouse will share any last minute repair costs as well as the closing costs.
Similarly, your post-divorce budget may not have room in it to support your adult kids. Even if you’ve been supporting them for decades, your divorce may force them to finally have to stand on their own two feet.
That’s not necessarily a bad thing. (Although they’re probably not going to like it and may resent you enormously, especially at first!)
8. The Loss of a Lifetime Identity. After you’ve been married for years – or decades – you think of yourself as a married person. You have married friends. You do the things that married people do. Like so many other married people, you dreamed of growing old with someone by your side. … or, at least you had those dreams once upon a time.
When you get divorced, all of that changes.
Your married friends will either take sides or avoid both you AND your spouse like the plague. It almost seems like they’re afraid that your divorce is catching, and that if they continue to spend time with you, they’ll end up divorced too.
Worst of all, for a while (maybe a long while!) you’ll question who you are. You won’t know what you’re “supposed” to do, or how you’re “supposed” to act. You will look back and start questioning your whole life, and everything you thought you knew. Looking forward is no better.
Suddenly, you’re not sure what your future is going to look like anymore. The vision you had for how your life was going to go just evaporated like a puddle on hot cement.
As if all that wasn’t enough, divorce will probably change your status, too.
When you were married, you lived in a certain area. You drove certain cars and had a specific kind of lifestyle.
After your divorce, you may not be able to afford any of that anymore.
Most people’s lifestyle takes a hit when they get divorced – at least for a while.
You may no longer be able to afford the things you had grown accustomed to having. If you still have kids at home, they may not be able to participate in expensive sports or attend private schools. Your adult children may have to learn to stand on their own, without help from mom and dad. Instead of shopping at Whole Foods, you may find yourself in Costco.
All of those things require a profound adjustment. They require you to change your mindset and adjust your identity. While younger divorcing people may have to make those kinds of changes too, it’s still much easier to make those shifts when you’ve only been married for two or three years than it is to make them when you’ve been married for twenty or thirty years.