Divorce with an Age Gap

A study done by The Atlantic discovered that the greater the age difference between married individuals, the higher the odds are that they will wind up divorced. Why is this true? Well, there can be various reasons — a power imbalance, fertility issues, children from previous marriages or simply, the individuals being at different life-stages. Does this effect divorce negotiations surrounding money? It can … and the effects can be significant.

Retirement accounts are always a source of angst when a couple is getting divorced but with people who are closer to retirement, this can become a huge sticking point. Let’s say one individual is 64 and the other is 52. The 64 year old only has a few more years to accumulate assets for retirement and therefore, will be less inclined to want to split those assets with a soon-to-be-ex spouse. The ability of $1,000,000 to generate income in retirement is far greater than $500,000. This, of course, doesn’t take into account whether there is money in the retirement account that existed prior to the marriage which could be considered separate property in an equitable distribution state.

And speaking about income, social security benefits pose another type of challenge for couples with a large gap in age. In the above scenario, the 64 year old most likely has a FRA (full retirement age) of either 66 or 67. Their ability to collect social security income is within reach of a couple of years. HOWEVER, the younger ex-spouse needs to wait until at least age 62 before they can even think about collecting on their spousal benefit, and, because of their age being before their FRA, the benefit they might receive will be reduced.

That’s not the only challenge with social security and retirement age where there is an age gap. What about spousal support? If the older member of the couple needs to pay the younger spousal or child support, the calculation is based on earned income. What happens if and when they decide to retire?

All of these financial challenges and more are significant when dealing with a divorce with an age gap. As a CDFA (Certified Divorce Financial Analyst) I help individuals and couples come up with different scenarios to deal with these challenges, helping them get to a solution that works best for their unique situation.