Divorce deeply impacts all aspects of your life, not just your marriage. As prior posts on our family law site have covered (read more about retirement, the economy and property as they relate to divorce), the impact of divorce reverberates through parenting, housing, work, money, insurance, and retirement.
Many men and women fear divorce will disrupt their chance at a healthy retirement. That doesn’t have to be the case, however. With informed focus and proper planning, your divorce can not only lead to the end of an unhappy marriage, but also the beginning of a secure, happy retirement.
Speaking of Secure, What About Social Security And Divorce?
Social Security isn’t just a political talking point. For those like you who might be nearing retirement, Social Security benefits will make up a good portion of your financial stability. But when you divorce, whose part and how much of that security is still available to you?
For the most part (and, of course, this can get complicated), you can receive a portion of your ex-spouse’s Social Security benefits even when you are divorced. The availability of those payments to you is a sort of nod to the reality that you likely helped support your ex during their career through your own sacrifice and support.
In California, for example, if you were married for at least 10 years, are of retirement age, and your own Social Security benefits would be less than your ex’s, you will likely be awarded half of your ex’s payments, even if he or she is remarried. It’s important to note this is not the case if you yourself remarry.
The remarriage aspect of this financial area in divorce can make for important financial and personal decisions. If by remarrying someone you will lose out on your ex’s benefits, is it still financially feasible to get by? Would you still want to get remarried? These are important questions to consider before getting yourself into a new marriage and financial situation tainted with possible resentment.
Is Postponing Divorce Worth Health Insurance Savings?
Here you are. You have made the brave, possibly overdue decision to file the divorce papers and move on with your life. Why might some sources suggest you take a breath and think about your health insurance options first?
Perhaps you’ve been fortunate to have been covered through your spouse’s work health plan coverage. It likely served you well and was a great value while you were together. But once you divorce, you’re not able to share that health insurance plan as you did while married. You could elect to get COBRA coverage through your ex’s work, but that is expensive. Depending on your income after divorce, the cost of health insurance through the Affordable Care Act actually might not be very affordable.
A different and perhaps odd-sounding choice is to wait to legally divorce until you are 65 and eligible to receive Medicare coverage. You can remain covered through your ex’s health insurance plan even if you legally separate. If you do not have long before turning 65 and can tolerate the wait, separating before divorce can make a big difference in the cost of your health care.
Of course, an experienced divorce attorney can work with you and the other party’s legal counsel to negotiate a reasonable time period of continued coverage following the finality of the dissolution.