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The financial impact of later divorce on retirement

On Behalf of | Oct 26, 2016 | High Asset Divorce

The rate of divorce for people over the age of 50 has climbed even though the rate of divorce for younger people has fallen. This trend of divorcing when people are older has had an outsized impact on their ability to retire, particularly for women in Maryland and around the country.

According to the National Center for Family & Marriage Research at Bowling Green State University, the divorce rate doubled for people over age 50 between 1990 and 2010. The increased divorce rate might be a reason that one out of every five people over age 65 are working. Divorces that happen later in life often force people to put off their retirements.

Another study from researchers at Boston College and Mathematica Policy Research found that the older a woman is when she gets divorced, the more likely it is that she will be required to work full time after retirement age. While only 3.2 percent of married people are poor when they are over age 62, 19 percent of people who divorced after age 50 are poor when they are over age 62. Part of the reason is that they receive less in Social Security benefits. For example, married people receive an average of $22,507 annually while single people receive an average of $12,092.

One aspect of a divorce later in life is that a retirement account of one of the spouses will likely have to be split pursuant to a qualified domestic relations order. This can have a severe financial impact on the owner, and a family law attorney can take this into account when negotiating a property division settlement agreement.

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