This article looks at why so many Baby Boomers are divorcing and why women are most affected.
Baby Boomers are divorcing in record numbers. As The Week reports, divorce rates for most age groups have stabilized or declined, but for those aged 50 or over they are rising faster than ever before. Currently, about a quarter of all divorces involves at least one spouse who is over 50. The reasons for this so-called “gray divorce” trend are numerous, but one thing that is certain is that getting divorced later in life does hold unique challenges, especially in terms of retirement planning.
Why are Baby Boomers divorcing?
Every couple divorces for their own reasons and that is certainly true of gray divorces. One theory as to why so many Baby Boomers are getting divorced is that their children, now in their 20s and 30s, are finally becoming financially independent, thus giving their parents the freedom to choose divorce. In many such cases, the couple may have been unhappily married for years but decided to stay together for the sake of their children.
Another theory is that Baby Boomers were the first generation that saw a large number of women in the workplace. As a result, female Baby Boomers tend to have greater financial resources than their parents would have, thus giving them the option to leave an unhappy marriage should they want to do so.
Retirement challenges for gray divorces
However, although women tend to be more financially independent than in the past, there is still a tendency to let the husband control most of the finances. As Bloomberg reports, 56 percent of married women still leave major financial decisions to their husbands. That can leave women especially vulnerable to unwanted financial surprises if their marriage breaks down later in life. The same survey reported on by Bloomberg showed that 59 percent of widows and divorcees said they wished they had taken a greater interest in long-term financial decisions during their marriages.
The fact of the matter is that getting divorced has major implications for one’s financial and retirement goals. Many people going through divorce are often unaware of what rights they have in dividing retirement assets or how to go about avoiding hefty taxes and fees. For example, while pensions can usually be split between divorcing spouses, a form called a Qualified Domestic Relations Order (QDRO) will have to be filed to transfer a portion of the retirement fund from one spouse to another. Without a QDRO, one or both parties could be facing massive early withdrawal fees and taxes.
Family law assistance
No matter one’s age, getting divorced is going to lead to major legal and financial decisions having to be made. These decisions could have an impact on one’s well-being for years into the future. That is why it is so important for anybody going through a divorce to talk to a family law attorney. An attorney can assist clients with various issues raised by their divorce, including how to best protect their assets going into retirement.