Even the most strategically created retirement plans in New York can end up being derailed by the dissolution of a marriage. This can happen to individuals of all ages, but it is particularly true for those who decide to go through a gray divorce — a divorce that takes place close to retirement. These individuals find themselves lacking the time needed to restore their finances following their marital breakups.
Divorce can be financially difficult because it involves not only splitting marital assets but also perhaps doubling a couple’s expenses. After all, with the divorce, the two parties now have to cover the expenses of two households using the same pot of assets they were using to finance a single household prior to the divorce. The transition to independent living may be especially challenging for those who did not work outside of the home or make a lot of money while they were married.
However, for those who are at retirement age, there are a couple of important tidbits about divorce and Social Security. A spouse might be eligible to claim Social Security benefits based on the work record of his or her ex if the benefit amount will be bigger than the amount he or she would receive based on his or her own earnings history. However, for this to take place, the spouse has to be single, and both the spouse and his or her ex must be 62 years old or older. In addition, they must have been married for at least 10 years.
Getting a divorce in New York can understandably be emotionally and financially complicated and overwhelming. However, if two spouses can find common ground regarding divorce matters, such as property division, this may make the process easier for both parties. They can simply work toward a settlement that will ultimately satisfy them both through a process such as informal negotiations or mediation.
Source: chicagotribune.com, “Gray divorce can have big financial impact“, Eileen Ambrose, March 2, 2018