Nearly half of all marriages in the United States end in divorce, and the post-retirement population is not immune. Marriages that have weathered years of difficulties might suddenly crumble in the face of new challenges and stresses brought on by retirement. The division of assets and retirement benefits poses its own set of problems. However, the Future Years website for retirees states that 75 percent of women and 81 percent of men find satisfying new relationships after post-retirement divorce.
Causes
Post-retirement divorce is becoming increasingly common for several reasons. Future Years states that many couples live with marital unhappiness for years but delay divorcing until they are older because they are waiting on financial security or waiting until their children are grown.
The American Academy of Matrimonial Lawyers finds that midlife crisises might lead to divorce. This represents a change in priorities that can cause dissatisfaction with the marriage and, in some cases, infidelity.
Lifestyle changes resulting from retirement are another commonly cited reason for divorce. Couples who are used to seeing each other in the evenings and on weekends suddenly find themselves with more together time than they can handle. In some cases, people experience post-retirement depression that can have a detrimental effect on the marriage.
Financial Effects
Statistically, divorce poses more of a financial hardship to women than to men. The Divorce Reform organization cites a 2000 USA Today article stating that more than 20 percent of post-retirement female divorcees live at or below the poverty line. Reasons include short-term rather than long-term planning and poor financial decisions, like trying to keep a house that required two incomes to maintain. The organization also cites Wallerstein and Blakeslee's study, reporting that only 10 percent of middle-class couples are financially better off within 10 years of divorce.
Military Retirement and Divorce
Divorce involving military retirement benefits is a special case. Federal, rather than state law, covers this issue under the Uniformed Services Former Spouses' Protection Act. In a divorce involving a military retiree, it is important to use the services of an attorney specializing in military cases. The Equality in Marriage Institute archives state that spouses must claim their share of military benefits within one year of the divorce. Spouses who remarry before age 55 are not entitled to benefits.
Retirement Benefits as Community Property
In most divorce cases, some division occurs of what is considered community property. According to the Legal Zoom Divorce Education Center, retirement benefits considered community property include 401k and 403k plans, individual retirement accounts or IRAs, employee stock option plans, Keoghs, Employee Retirement Income Security Act, military pension and some veteran's benefits.
Retirement benefits not considered community property are Social Security and worker's compensation disability payments, including military injury benefits.
Dividing Benefits
A common option for dividing retirement and other assets is a buy-out, in which a spouse accepts money, property or other valuables in exchange for giving up the rights to a share of retirement benefits. Another option is dividing the benefits into two accounts. Ask your attorney about a Qualified Domestic Relations Order, which is a legal document establishing division of assets and tax responsibilities.
