Gray divorces: A costly impact late in life

As someone approaching retirement, the last thing you expected was to be navigating a divorce. Gray divorces, or divorces that take place among Baby Boomers or those married 40 years or longer, are devastating for some. Not only is the relationship ending, but the finances of the couple become a concern.

Fortunately, mediation is a possibility for people in your situation. This allows you to discuss your finances and other factors in your divorce without necessarily needing to take those concerns to court. Mediated divorces cost between $5,000 and $9,000 in most cases. Collaborative divorces cost between $25,000 and $50,000. They both cost thousands less than a litigated divorce, which may end up costing between $75,000 and $150,000 on average. It's worth working together to come up with an appropriate settlement.

Why is it a good idea to work together to resolve the divorce?

In a divorce that's litigated, the time it takes to resolve the case turns into years. It's not uncommon to see a divorce take two or three years. In a mediated divorce or a collaborative divorce, the timeline shortens significantly to between eight months and one and a half years. Essentially, the faster you negotiate and settle, the faster the divorce.

What should you do to protect your finances?

If you're the breadwinner and have a spouse who didn't work but supported the family, be prepared for the possibility of having to pay alimony. You can negotiate to protect your retirement by offering a lump sum of other assets, or you may choose to pay out an equitable share over time, hoping that your spouse remarried or does something that limits your requirement to pay. On the other hand, if you're the spouse who stayed home with children or who has no career to fall back on, it's important to seek alimony and your fair share of retirement accounts, stocks and other assets.

Getting your finances right is an important part of your divorce. Take time to negotiate, so you have a stable future.

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