If you plan to retire shortly after your divorce in North Carolina, you may have to take distinct factors into account. These so-called “gray divorces” involve considerations that younger spouses may not even think about. Retiring can be a stressful time with serious financial pressures, and divorce can add to these pressures. Thankfully, divorce does not necessarily need to prevent you from enjoying your twilight years. In fact, divorce may even lead to a more comfortable retirement – especially if you work alongside an experienced divorce lawyer in North Carolina.
Consider Whether Your Alimony Will Continue After RetirementOne of the most important considerations for older spouses during divorce is alimony. Also known as “spousal support” in North Carolina, this form of income may prove vital during retirement. Of course, the debate depends on who is making these payments. If you stand to pay alimony after your divorce, this could also become an immense burden.
Note that gray divorces are more likely to result in long-duration alimony for numerous reasons. First, you have to consider the age of the spouses. Even if spouses face just five years of alimony, this may function in the same way as permanent alimony if the spouses are nearing the end of their lives. For example, you might divorce at the age of 65. A five-year alimony term might force you to pay (or receive) alimony for most of your remaining years.
Furthermore, elderly spouses are more likely to divorce after decades of marriage. If you end a 20 or 30-year marriage, the general rule is that your alimony will continue for half of the marriage’s duration. If you end a long marriage at the age of 60 or even 55, this could effectively represent permanent alimony.
Retirement could help support you well into your twilight years. Alternatively, spouses forced to pay alimony may have no other option but to continue working longer than they initially planned. This is something you might need to discuss with your lawyers – and perhaps your financial advisers.
Consider the Health of Both Spouses Prior to RetirementElderly spouses may be more likely to struggle with various health issues. These health issues could be psychological or physical, and they can affect divorce in various ways. For example, North Carolina follows a system of “equitable distribution,” – and one of the factors that courts consider during property division is the health of both spouses.
In other words, a spouse with health issues might receive more of the divorce settlement than a healthy spouse. This is also true with alimony, and a divorced spouse could potentially continue to receive alimony for longer than a healthy individual. In addition, a disabled spouse might receive more alimony than a healthy individual.
Be Careful With Your Divorce Settlement After RetirementAlthough a spouse with health issues might receive a higher portion of the divorce settlement, that doesn’t necessarily mean they’ll use it wisely. An elderly spouse must be extremely careful about how they manage their finances after a divorce. While a younger spouse may have time to go bankrupt and eventually recover, a retiree has only one chance to make it through their twilight years.
It might be a good idea to “downsize” after your divorce. For example, moving out of the family home and into a smaller apartment might leave you with more income to fund your retirement. You might also need to downsize in other ways by selling certain assets and investing your divorce settlement money wisely.
Prioritize Assets That Generate Passive IncomeIf you are going to fight for assets during divorce as an elderly spouse, you might want to prioritize assets that generate passive income. This passive income may be helpful during your retirement, so consider keeping these assets “intact.” For example, you and your spouse might have acquired a rental property during your marriage. If you keep the rental income flowing after your divorce, it could help fund your retirement.
The same logic applies to other income-generating assets. These might include dividend-paying stocks, treasury bills, bonds, CDs, and so on. Although it might seem tempting to liquidate these assets and take their cash value, you could blow through this cash in a few short years during retirement.
Contact Arnold & Smith, PLLC, TodayIf you have been searching for an experienced divorce lawyer in North Carolina, look no further than Arnold Smith, PLLC. Over the years, we have helped numerous divorcing spouses in the Tar Heel State – including those approaching retirement. We have considerable experience with gray divorces, complex assets, collaborative law, and much more. Reach out today to confidently plan not only your retirement but also your divorce.