Since the 1990s, the divorce rate for people age 50 and older has doubled. Furthermore, second and subsequent marriages are even more likely to end in divorce for people in this age group. These older couples have several financial factors to consider before separating.
For example, older couples may need to find out if one spouse will be eligible to draw Social Security benefits on the other spouse's work record. This may be the case if one person earned a significantly higher income than the other. However, it is also necessary for the marriage to have lasted for at least 10 years. Therefore, a couple might want to delay a marriage that is close to the 10-year mark if it will benefit one of them.
Another consideration may be the future changes in the tax laws regarding alimony. Beginning with new divorces in 2019, alimony payments will no longer be tax deductible. On the other hand, recipients will no longer have to report alimony as income.
Divorce may leave people struggling financially. That's why it's important for separating spouses to plan for the future. A divorcing spouse may want to visit an attorney and take their financial records to get a preliminary idea of how the divorce might affect them. The couple might be able to negotiate an agreement through divorce mediation. This process could include dividing a retirement account. It's important to remember that there are certain regulations to follow so taxes and penalties won't affect the withdrawal. Legal counsel could help with this process.