How to Financially Survive a Gray Divorce in Charlotte
Gray divorces that involve people age 50 or older are becoming more prevalent than ever. There are a growing number of people who are getting a divorce later in life. Some have been married for 30, 40, or even 50 years when they decide to get divorced.
Those who go through a gray divorce in Charlotte undergo a significant amount of financial and emotional stress. Untangling decades of marriage and accumulated assets can be incredibly challenging. Understanding the process of gray divorce and how to cope with it can help you survive the process. If you are considering a gray divorce, our law firm can help. Contact Arnold & Smith, PLLC as soon as possible to schedule your initial consultation.Understand How Divorce Will Impact Your Retirement Savings
Going through a divorce at any age can have a negative impact on your savings account. Going through a gray divorce as an older individual can become even more difficult because the divorcing spouses are either in retirement or preparing to begin retirement. The Government Accountability Office recently conducted a study that showed that divorce results in a 41% reduction in household income for women and a 23% reduction for men. This is reduction can be felt even more in a gray household where the spouses may be living on a fixed retirement income.
Additionally, older married couples have more assets overall than unmarried couples. If you are intentional about what you do during and after your divorce, you can help yourself avoid financial devastation after the divorce. What happens when a couple has lopsided savings? For example, when one spouse worked full-time and the other spouse stayed at home. In that scenario, the couple’s retirement savings might consist mostly or all of one spouse’s 401(k).
As you negotiate your division of property, including your retirement savings, it is important to remember that all your retirement accounts are not equal. You and your lawyer should address the tax implications of dividing your different types of retirement accounts. For example, if you have a $100,000 401(k) and a $100,000 Roth IRA, the Roth IRA will be significantly more valuable because you will not need to pay income tax on the money you withdraw from it.
Make sure you do not settle for any agreements with your spouse without discussing it with your attorney. You might think that an agreement benefits you, but you could find out later that it actually does not. Your lawyer can help guide you during the process.Consider Whether You Will Need to Re-enter the Workforce
What happens when one or both spouses are retired? Or, what happens when one spouse has been staying at home to raise children during the marriage? Your lawyer can help you advocate for receiving a fair amount of income after the divorce. Just because you did not work as much or at all during most of the marriage does not mean you are not entitled to enough of the assets to live a comfortable life.
If you and your spouse do not have significant assets, you may need to consider if you need to get a job. Or, if you were dependent on your spouse’s health insurance, you may need to seek employment with health insurance. Your lawyer can help you navigate how your future might look after the gray divorce.Consider Healthcare Power of Attorney and Beneficiary Designations
Many spouses who have been married for a long time have named each other as their healthcare proxies should they become incapacitated. If you named your soon-to-be ex-spouse as your health care power of attorney, you will likely need to create a new document and name another person. You may also want to change the named beneficiary on any other accounts that you keep after the divorce happens. Take some time to think about your estate planning to be sure that it reflects your current financial situation and goals after your divorce.Consider Where You Will You Live After the Divorce
After being married for a long period of time, it can be difficult to imagine your life without your spouse. Take some time to consider whether you will stay in your house, or whether you want to sell the family home and split up the proceeds between yourself and your soon-to-be ex-spouse. Consider what your finances will look like after your divorce has become finalized and plan accordingly so you will not run out of time to find a place to live after your divorce.Contact a North Carolina Divorce Attorney Today
If you are considering a gray divorce, our law firm can help. Contact Arnold & Smith, PLLC as soon as possible to schedule your initial consultation.