Can you lessen the financial impact of a gray divorce?

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Decades ago, when you walked down the aisle, the thought that you could end up divorcing after age 50 probably never crossed your mind. You felt as many people did back then — that you would spend the rest of your life with your new spouse.

Now that the kids are adults and living their own lives, things may have changed. Divorce doesn’t have the stigma attached to it as it used to. People live longer thanks to medical advancements, but that means you could have decades left with your spouse, and that thought scares you. For whatever reason, you no longer want to be married to your spouse, but you fear the financial implications of divorce.

Some preparation may help

As you contemplate divorce, you may want to take a good look at your current and future financial situations. The sad truth is that being single again will have a substantial impact on your finances. However, the more prepared you are, the better off you may be post-divorce. Taking the following steps could go a long way toward making that happen:

  • Gather as many financial documents as possible. Look for items such as tax returns, bank account statements, retirement account statements, and more.
  • Don’t forget about your debts. To have a complete picture of your current financial situation, you need to know how much you owe as well as how much you have.
  • Review your current insurance needs versus what you will need after the divorce. Health insurance is often a primary concern for¬†people who divorce over the age of 50.
  • Consider the tax implications of any decisions you want to make regarding the division of your marital property.
  • Consider the actual value and cost of fighting for particular assets. For instance, you may not actually be able to afford the family home on your own.

Finally, one of the best preparation tools at your disposal is the creation of a post-divorce budget. Consider what you will need in order to live once the income that used to support one household needs to support two households. Research indicates that the standard of living for individuals going through a gray divorce drops significantly afterward.

You may want to seriously consider preparing yourself for that possibility. Making smart and not emotional decisions could help you limit the financial impact of a gray divorce. You may also find it invaluable to discuss your situation with an attorney who routinely represents other Tucson residents going through a divorce later in life since you face issues that younger people may not yet need to consider.