Living in an unhappy marriage can take a toll on a person’s emotional health and well-being. When most people realize that their marriages are no longer working, they usually consider the next logical step — divorce. However, like with all major decisions, a person who is thinking about divorce should understand the future financial implications of this action. This is especially true for Texas residents who are in or near retirement.
A person who gets a divorce after the age of 50 will face unique challenges. For example, retirement accounts are often — although not always — considered marital property, meaning that a couple will have to divide their retirement savings. Whether a couple decides to split the funds half and half or to leave the account with one person in exchange for another asset, financial stability after divorce may not be guaranteed. This is because retirement savings that were sufficient to support two people in a single household generally do not stretch as far when supporting those same people in separate households.
Retirement is not the only concern. Standard of living drops 45% for women who divorce past the age of 50. Men in this same age group lose have a 21% drop in their standard of living. On top of this, both men and women can lose as much as 50% of their wealth. In general, women do tend to experience more significant financial setbacks than men.
Younger people in Texas frequently experience similar financial setbacks after divorce. However, they have an advantage — time. Gray divorce does not afford much time to rebuild wealth or retirement savings, which can seriously impact a person’s financial stability. This does not mean that a person should decide against divorce. Instead, an individual who is in this situation could choose to speak with an experienced attorney who may be able to help navigate this process.