4 financial implications of a gray divorce
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4 financial implications of a gray divorce

On Behalf of | Nov 8, 2023 | divorce

Gray divorce, a term referring to the dissolution of a marriage involving individuals over the age of 50, continues to rise.

While ending a marriage at any age can be emotionally taxing, gray divorce can present unique financial challenges.

1. Property division

In a gray divorce, the equitable division of assets can be a complex process. Pennsylvania is an equitable distribution state, meaning that the distribution of marital property is fair though not necessarily equal. Assets acquired during the marriage are typically subject to division, which may include real estate, retirement accounts and investments.

2. Retirement accounts

The division of retirement accounts like 401(k)s and IRAs is an integral part of a gray divorce, and it can have long-term financial implications. The courts may order the division of retirement benefits acquired during the marriage, and understanding the tax consequences and future financial security related to these accounts is important.

3. Social Security

Gray divorce can affect your eligibility for Social Security benefits based on your spouse’s work record. If married for at least 10 years and now divorced, you may be eligible for spousal benefits, which can be a vital source of income in retirement.

4. Health insurance

The cost and availability of health insurance can be a significant concern for older individuals going through a divorce. If you had coverage under your spouse’s health insurance plan, you may need to find an alternative insurance, which can impact your monthly expenses.

Although Pennsylvania had a relatively low divorce rate of 2.4 divorces per population in 2021, not all marriages stand the test of time. For older couples divorcing, it is important to consider the added financial aspect to help ensure a stable future.


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