Divorce During Retirement

A funny thing happens when you get busy with trying to achieve all the things you want out of life: You lose a few along the way. Unfortunately, some people lose their marriage.1 However, for those who are truly unhappy and can’t see a way back to blissful partnership, a “gray divorce” isn’t necessarily all negative. Even in retirement, leaving a spouse can open up new avenues to be explored, the chance to pursue activities perhaps not supported before and new opportunities to reinvent yourself.

With that said, you also must deal with a myriad of details when it comes to dividing assets to help ensure each ex-spouse has enough income to live comfortably during retirement. Just as it takes a village to raise children, it can take a team of experienced and qualified professionals to help you do this, from attorneys to financial advisors to tax planners and perhaps even a therapist. The goal is to emerge confident about your financial future, and we’re here to help both spouses on this journey should you need it.

When it comes to Social Security, there are certain rules that apply to benefits for a divorced spouse based on the ex’s earning history. For example, the marriage must have lasted for at least 10 years, the couple must be divorced for at least two years and the claiming ex must be currently unmarried – if the claimer gets remarried, the ex’s spousal benefits will stop. Furthermore, the ex-spouses must both be at least age 62 to begin drawing spousal benefits, and the spouse/divorcee must be full retirement age to be eligible for the full spousal benefit.2

Another important component to address is life insurance. If there are alimony payments involved, life insurance can help cover the loss of that income should the payer die first. Depending on their circumstances, divorcing couples may want to update their named beneficiaries on their respective policies. If a policy has a cash value, that money belongs to the owner. While the policy is active, the owner may forgo the death benefit and instead take the cash value, a process known as cashing out your life insurance policy.3

Research has found that divorce may be a reason why many people are working long past traditional retirement age.4 Because of this, it’s important to set aside animosity and work on an equitable agreement for both spouses’ retirement. Divorcing spouses should be cognizant that if one ends up struggling financially, their adult children may have to pick up the slack.5

 Content prepared by Kara Stefan Communications

1 Linda Melone. Next Avenue. July 11, 2016. “Why Couples Divorce After Decades of Marriage.” http://www.nextavenue.org/slideshow/why-couples-divorce-after-decades-of-marriage/. Accessed June 6, 2017.

2 Social Security Administration. “Retirement Planner: If You Are Divorced.” https://www.ssa.gov/planners/retire/divspouse.html. Accessed June 6, 2017.

3 Greg DePersio. Investopedia. Nov. 25, 2015. “How Life Insurance Works in a Divorce.” http://www.investopedia.com/articles/personal-finance/112515/how-life-insurance-works-divorce.asp. Accessed June 6, 2017.

4 Ben Steverman. Bloomberg. Oct. 17, 2016. “Divorce Is Destroying Retirement.” https://www.bloomberg.com/news/articles/2016-10-17/divorce-is-destroying-retirement. Accessed June 6, 2017.

5 Charlotte Cowles. The Cut. May 12, 2017. “My Mom Is Broke. How Can I Help Her?” https://www.thecut.com/2017/05/my-mom-is-bad-with-money-how-do-i-help-her.html. Accessed June 6, 2017.

Our firm is not affiliated with or endorsed by the Social Security Administration or any governmental agency and does not provide tax or legal advice.

Life insurance policies are contracts between you and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Retirement: Loneliness Can Sneak Up on You

Even people who have spent a lot of time planning for retirement may encounter unexpected challenges once they’re in those golden years. They focus on retirement income planning, which is, of course, important and appropriate — and we can help you there. They also focus on things they want to do while they’re still in good health, such as traveling or playing pickleball. They look forward to spending more time with their spouse and good friends.

It can be quite joyful, but the less joyful realization often sets in when a spouse or a close friend passes away. That’s when many retirees truly understand they are facing the reality of their mortality. Apart from that, they’ve also lost a best friend and companion.1

Sometimes the pain of loss causes us to want to avoid that pain altogether, which can lead to an unwitting desire to isolate ourselves. Unfortunately, this can be particularly problematic during retirement, when people are less likely to have scheduled daily interaction with others outside the household.

Studies in the U.S. and Britain show the prevalence of loneliness among people older than 60 ranges from 10 percent to 46 percent.2 Additionally, people with low levels of social interaction can experience brain changes that cause them to see other human faces as threatening and, therefore, are less likely to seek social ties.3 It’s all kind of ironic, isn’t it? With so many people experiencing the same malady, you would hope we could find each other, since companionship would certainly help.

One social scientist — Robin Dunbar, an evolutionary psychologist at the University of Oxford — summed it up with this observation: “It has become apparent in the last 10 years that the most important factor influencing your health, well-being, risk of falling ill, even your risk of dying and divorce is actually the size of your friend network.” His research shows bonding is strongest when endorphins are released, so he recommends that one way to strengthen friendships is by singing, dancing and working out with others.4

Retirement isolation is being studied from a number of different perspectives, particularly in housing. Although many retirees are reluctant to move to an assisted living facility, the longer they live, the more they will need help. Some have taken to moving into co-housing apartment buildings in which the tenants plan activities and support each other without all the rules and restrictions of a retirement home.5

We’re always happy to get together and chat with you about any retirement income planning questions you might have. Give us a call toll-free at 1-888-272-1099 if we can be of assistance and be sure to spend time with friends and family doing the activities you enjoy.

Content prepared by Kara Stefan Communications.

 1 National Institute on Aging. July 2016. “Mourning the Death of a Spouse.” https://www.nia.nih.gov/health/publication/mourning-death-spouse. Accessed May 28, 2017.

2 Katie Hafner. The New York Times. Sept. 5, 2016. “Researchers Confront an Epidemic of Loneliness.” https://www.nytimes.com/2016/09/06/health/lonliness-aging-health-effects.html?_r=2. Accessed June 13, 2017.

3 Olga Khazan. The Atlantic. April 6, 2017. “How Loneliness Begets Loneliness.” https://www.theatlantic.com/health/archive/2017/04/how-loneliness-begets-loneliness/521841/.

4 Aylin Woodward. Scientific American. May 1, 2017. “With a Little Help from My Friends.” https://www.scientificamerican.com/article/with-a-little-help-from-my-friends/?WT.mc_id=SA_TW_MB_NEWS. Accessed May 28, 2017.

5 Idil Mussa. CBC News. May 2, 2017. “Seniors in Ottawa look to co-housing to avoid isolation.” http://www.cbc.ca/news/canada/ottawa/seniors-in-ottawa-look-to-co-housing-to-avoid-isolation-as-they-age-1.4094267. Accessed May 28, 2017.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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