Just like marriage, divorce isn't for just for one demographic of couples. Both newlyweds and so-called empty nesters in New York can come to the understanding that a marriage just hasn't been working and that divorce is the most appropriate course of action. However, unlike their younger counterparts, couples who choose to divorce closer to retirement may have more on their plate to worry about.
Research data from 2009 demonstrated that the divorce rate for couples in their 50s wasn't slowing down. About 600,000 couples from that age group, or roughly one in every four couples, filed for what is commonly called a gray divorce. While younger couples who choose to divorce typically split whatever retirement funds were saved during the marriage, this will typically be less of a concern because of the amount of time left to rebuild a retirement account.
Those pursuing a gray divorce may be confronted with the reality that the retirement funds that they carefully counted and stored away will have to be split between two individuals. What was previously a sufficient amount for a couple may not be adequate for maintaining two separate households and lifestyles. While this may seem disheartening, there are still options available to couples that can help soften the blow of splitting up assets that include a retirement account.
Although New York couples getting a gray divorce may be relatively close to retirement age, typically there are still many years left before that time comes. This may allow for retirement funds to be built back up by each individual. Additionally, with careful planning a couple can reach a settlement agreement that addresses how both retirement funds and other assets and finances will be distributed that will be fair and reasonable for everyone involved.
Source: bizjournals.com, "BLJ Editor's Notebook: Impact of 'gray divorces' on retirement", Michael Petro, Jan. 29, 2015