Many couples have gotten divorced later in life in recent years. A common explanation for this phenomenon is that people live longer than in years’ past. A couple in their 50s could still be together for 30 or 40 more years, and many people do not want to stay in an unhappy marriage for that long.
For the most part, gray divorce is similar to a divorce between a younger couple. However, there are some differences an older couple needs to prepare for. With retirement right around the corner for these couples, it is vital to be ready for a divorce in the golden years.
Need to divide retirement accounts or pension plans
If a spouse was a government official, police officer, firefighter or teacher, then there is a good chance he or she has a pension in place. There are other professions that provide a 401(k) or IRA. This money goes toward the employee and not necessarily the individual’s spouse. Awarding part of this pension plan as alimony is difficult because penalties are possible if done incorrectly.
Determine the total amount of alimony
Figuring out alimony is so much more than considering a person’s income. The couple needs to bring certain items to the table to determine how much a spouse needs to pay. Some common items that become part of an alimony plan include the following:
- Car allowances
- Executive compensation packages
- Ownership stakes
- Restricted stock units
- Corporate bonuses
- Travel perks
Look at Social Security
Even after a divorce, it is possible for one spouse to collect Social Security off of what the other party earns. Therefore, alimony also needs to consider Social Security payments one spouse receives. A couple does not want to go through the entire divorce process only to realize a spouse’s earnings are higher than anticipated. Any couple married for at least 10 years qualifies for Social Security benefits even after one spouse remarries.