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Alimony and gray divorce

On Behalf of | Feb 17, 2023 | High Net Worth Divorce

Spousal maintenance is often an issue when a high-asset Fort Collins couple gets divorced. This is true regardless of how old the spouses are, but it certainly includes couples splitting up after age 50, commonly known as “gray divorce.” In fact, the stakes can be especially high. Whether alimony is included in the divorce settlement or not can have profound implications for your retirement.

Though both spouses work full-time in many wealthy families, it is also common for one spouse to be the breadwinner and the other to be in charge of the home and child-rearing duties. The latter spouse often sacrifices their own career. Someone who was married for decades and is now going through divorce may lack the experience, education and job skills to support themselves financially. And someone in their 50s, 60s or 70s is unlikely to have much time to get the training or education to break back into the workforce.

Most of the time, it is the wife who faces this problem. About 27 percent of American women aged 63 and older who went through gray divorce experience poverty. That is nine times the rate for married people the same age.

A lifesaver for the recipient

Property division, especially dividing up the retirement savings, can help make up for a lack of financial independence after a gray divorce. So can Social Security spousal benefits. But retirement funds don’t last forever. And the rules around Social Security spousal benefits can be strict. This is where alimony often comes in. Whether as a lump sum or regular payments, many older Coloradoans rely on spousal support to help maintain their lifestyle.

A burden for the payor

On the other hand, alimony payments can be a burden for the ex ordered to pay, especially if the order is not for a fixed time period. The paying ex could be forced to adjust their retirement plans, including continuing to work for longer than they expected, to afford the payments.

Your financial settlement should be acceptable to both sides and practical for the long term. Your divorce attorney can advise you on how to work out an agreement that will allow you to enjoy your retirement.