Divorcing after 50? Don’t make these financial errors

The rate of gray divorce in Montana, as in the rest of the country, continues to increase, even as other age brackets see the rate remain stable or decrease. There are many for this, but the one thing all residents divorcing after 50 should keep in mind is that financial errors during the divorce can have severe consequences. There are two main areas that you should be aware of as you begin negotiating your divorce settlement.

Organizing and planning

One of the biggest errors people make going into divorce negotiations is not knowing their real financial situation, including assets and debts. Before the process starts, you should list all the assets and debts you do know about, gather supporting documentation, such as copies of bank accounts, property titles and tax returns. As well, you should get a full credit report for yourself and for your ex-spouse. Another common error is not planning for the future. When people divorce, their expenses rise and the household income drops. You should anticipate this and make an honest budget that estimates your real bills and what you can afford.

Retirement and health

For couples undergoing gray divorce, financial errors during negotiations can also mean that retirement and health care are affected. You should consider how you will pay for health insurance, particularly if you had been previously covered by your spouse’s job and are not yet eligible for Medicare. As far as retirement goes, you should always consider the following:

  • Tax implications for any financial decision
  • The fees that might be taken out if you withdraw money from your ex-spouse’s retirement account before age 59 ½
  • Using a QDRO or qualified domestic relations order to protect your retirement assets

During a gray divorce, you should plan carefully and seek sound advice from professionals. With this, you should be able to negotiate a fair settlement during divorce.