More and more retirement-aged adults are getting divorces. The trend for senior-aged couples getting divorces has been called “gray divorce.” For many people in a gray divorce situation, they postponed getting a divorce to spare their children the hardships of divorce, were deterred from getting a divorce because of financial reasons, while others had simply become disillusioned with marriage.
However, getting a divorce at such an advanced age can disrupt someone’s plans for retirement. This blog looks at the impact retirement has on divorce and vice-versa.
Most people who save for retirement these days use tax-deferred vehicles such as 401k plans and IRAs. When a couple gets a divorce, the retirement benefits from such plans may be divided between the spouses. Dividing retirement benefits from tax-deferred can only be accomplished using a “Qualified Domestic Relations Order” (QDRO). Usually, an order for spousal or child support in a divorce qualifies as a QDRO. Additionally, such retirement plans may be subject to division as a community asset under California law.
The extent to which a person’s retirement benefits are subject to division as a marital asset depends on when the contributions to the retirement account took place. Contributions that were made while the employee was married are considered to be community property subject to equal division upon divorce. Contributions made before marriage or after the parties’ date of separation are considered to be separate property not subject to division upon divorce.
Social Security Benefits
Spouses may claim fifty percent of their former spouse’s social security when they reach full retirement age. Claiming a part of one’s former spouse’s social security benefits will not impact their own right to receive social security benefits.
In general, a spouse can claim a portion of their spouse’s social security benefits if the following conditions are satisfied:
- The couple was married for at least 10 years
- The couple got a divorce
- Both spouses are eligible for social security benefits and are over the age of 62
As you can see, divorce can affect retirement. However, retirement can affect divorce proceedings as well. When assessing issues of spousal support, California courts must consider the age and health of the parties. When a spouse requesting spousal support is around retirement age, and they were married to the other party for ten years or longer, the court would be more inclined to award permanent spousal support.
Contact The Neshanian Law Firm Today
Getting a divorce is one of the most challenging experiences a person can go through. Studies have shown that divorce is considered to be the second most stressful event a person can endure next to the passing of a spouse. To help make divorce easier, you should consult an experienced attorney from The Neshanian Law Firm, Inc.. We have experience working with various family law issues, such as divorce, spousal support, and property division.
For more information about how we can help you, call us at (949) 577-7935 or contact us online today.