Divorce can always be difficult to navigate, no matter the age you sign the papers. But there is a unique set of challenges that comes when a marriage ends later in life, potentially after decades of merging your lives and building what you believed would be your future together.

One of the biggest challenges can be figuring out how a divorce will impact your retirement plans and the changes to your income. Will you still qualify to receive your former spouse’s Social Security benefits? How do you divide the retirement funds you’ve both been contributing to for years? Can you stay on your ex’s health insurance?

Silvur’s Retirement School is uniquely poised to help you answer those questions. Classes including “Social Security Benefits for Divorced Couples'' can bring much-needed clarity to notoriously complex situations. Plus, we’ve gathered some tips here that will help you navigate late-in-life divorce, move forward, and embrace the next phase of your life.

Managing Social Security after a Divorce

There are a few different scenarios that will determine what you’re able to claim when it comes to Social Security post-divorce.

Since marital status can affect Social Security in several different ways, the system can seem unfair in the case of a late-in-life divorce. That’s especially true for women who may have taken time out of their career to raise children or be a caretaker. While they may not have been paying into the Social Security system during that time, their contributions were making it possible for a spouse to work and eventually collect the benefit payment they believed would one day support them, too.

It’s a lesson that Silvur user Claudia learned firsthand after going through a divorce after 35 years of marriage. Her experience highlights some of the key steps to take when determining what your Social Security will look like post-divorce:

Figure out exactly what you’re owed.

First, find out what your Social Security payment will be so that you can accurately plan for the years ahead. If you haven’t started collecting yet but were planning to collect spousal Social Security (as opposed to collecting from your own earnings history), you may qualify for divorce benefits. In order to do so, you must have been married for at least 10 years, and not get remarried. If that’s your case, you’ll be able to collect up to 50% of what your ex-spouse could collect at their full retirement age (FRA). This doesn’t have any impact on that ex-spouse’s payment; you’re simply entitled to a separate payment of your own based on their history. You don’t have to receive any kind of permission from your ex to claim, and you can still collect it if they remarry.

Social Security will give you the highest payment possible. Keep in mind that if your own work history qualifies you for a higher benefit payment than the 50% you’d receive from your ex-spouse’s work history, Social Security will give you the higher payment.
Deciding whether or not to delay. If you’re only able to collect divorce benefits (as opposed to any payments based on your own work history), you will receive 100% of the divorce benefits at your FRA. If you qualified for your own benefits, you would receive more than 100% of your payments by delaying past your FRA. However, divorce benefits max out at 100% at your FRA, so it doesn’t make sense to delay past that. If you haven’t started yet, claim it as soon as you reach your FRA, rather than waiting until 70.
Taking advantage of Retirement School. Silvur has several resources that can help you understand more about your personal benefits. Enroll in “Social Security Benefits for Divorced Couples” today to figure out how to optimize your benefits and better prepare for retirement.

Figuring Out Health Insurance Post-Divorce

If you divorce before qualifying for Medicare and aren’t on your own employer-sponsored plan, figuring out health insurance can be one of the toughest parts of divorce. But it’s also absolutely critical to your wellbeing, so make sure that figuring it out is one of the first steps you take as you’re going through the process of divorce. In fact, you’ll want to make sure it’s one of the costs or plans that should be factored into your divorce negotiations since your options are expensive.

Divorce qualifies as a “life-changing event,” which gives you the power to change your healthcare benefits outside of general enrollment periods. You generally have two options for coverage if you aren’t on Medicare yet: ACA or COBRA. We dive deeper into these routes in the Retirement School, but we’ve also provided some information here to help you better understand your early retirement healthcare options:

COBRA

If you were receiving health insurance through your spouse’s employer, you may be able to stay on their plan for up to 36 months post-divorce, thanks to COBRA coverage. This can be beneficial for people who are perhaps already going through some sort of medical treatment and don’t want to switch to a new plan and medical stuff. But the downside is cost. It’s likely those premiums will rise significantly (since you’ll now be responsible for the entire cost of the premium, plus potential fees), so it’s smart to get a cost estimate to help you decide if that’s your best option.

Affordable Care Act (ACA)

If COBRA coverage isn’t possible or is too expensive, you may have to turn to plans available via the ACA. This could include a short-term insurance plan, which may have catastrophic coverage that could hold you over until you qualify for Medicare. Silvur’s Retirement School class “ACA'' under Early Retirement Healthcare can help you understand the types of plans available to you and guide your search for coverage that fits your needs.

Depending on your new income levels, you may qualify for some subsidies through plans available through the health insurance marketplace. In 2021, you qualify for a subsidy through the form of a tax break if your insurance plan costs more than 8.5% of your household income.

With the debilitating cost of healthcare in the US, it’s possible that, depending on your circumstances, paying for health insurance post-divorce would be a giant financial burden. If you’re nearing 65 and are in a situation where you can handle staying legally married until you qualify for Medicare, you might consider an informal separation until you can finalize your divorce without having to worry about pre-Medicare healthcare solutions. You can also make sure that negotiating the cost of healthcare until Medicare is a key part of your settlement, guaranteeing you’re not left hanging with giant insurance bills.

Silvur’s Retirement School has designed a special class for women in these situations. Enrolling in “Early Retirement Healthcare for Women'' can help people who are navigating healthcare options following a divorce, the death of a partner, or a situation where their partner already qualifies for Medicare but they still don’t.

Dividing Your Assets

Splitting up stuff is never easy, but it becomes even more difficult when you both have been contributing to the household for decades and don’t have as much time to make up any losses. There are several different assets you may have to figure out how to divide, but here are a few things to think about as you do:

Negotiating your house: If you’ve invested in a home with your former partner, this is one of the biggest assets you’ll have to negotiate. Think about your personal situation and what makes the most financial sense for you going forward. If you are the one hanging on to the house, remember there are a few things you can do to make it more financially manageable. If you’re 62 or older, you may qualify for a reverse mortgage, which can be a good option for some divorcees to access cash. You might also qualify for an age-related property tax break or exemption. Or, maybe you have an option to move elsewhere but keep your home to bring in rental property income via a service like Airbnb. There are also great reasons for selling a home and downsizing, as a sale and move could give you a good chunk of money that would help carry you into retirement. It might also bring more freedom to find a place better suited to your needs, or one in a more retirement-friendly area. Check out Silvur’s Cost of Living Calculator to see if there’s an area that would make sense for you to relocate.
Splitting retirement funds: Along with making sure that both parties feel they get what they deserve from divvying up funds like 401(k)s or IRAs, it’s critical to make sure you understand the best way to do so to avoid any penalties on distributions or unexpected taxes. Using methods including a qualified domestic relations order (QDRO), for instance, can allow you to make a withdrawal from a former spouse’s 401(k) without being taxed on it, even if you’re not yet 59½. You and your lawyer can take the time to review the best ways to split these funds to make sure everyone benefits.
Looking into debt: Make sure you know what debt your former spouse has before finalizing a divorce, and decide on how either of you will continue to pay that debt (like making car or credit card payments) post-divorce. You may want to take extra measures for ensuring payment, like putting money in an escrow account or adjusting alimony to make sure there’s enough to dedicate to certain payments. This is important because depending on the type of debt and your state, it’s possible you’ll be partially responsible for a spouse’s debt, even if it’s not in your name. You can ask your lawyer to make sure both of you do a full credit check as part of your proceedings.
Anticipating taxes: Every move, from alimony payments to transferring a portfolio, can have tax consequences, and it’s a rookie divorce mistake to forget about these when deciding what you want in a split. When settling on the terms of your divorce, make sure you’re factoring taxes into any payments or investments you’ll have going forward.

No matter what you have to divide or how you decide to do so, it’s important to remember to think practically and avoid putting all your eggs in one basket.

For instance, maybe you feel you’re 100% entitled to a sizable investment fund to which you’ve contributed the majority of the money, or have an emotional attachment to your home—so great an attachment that you give up everything during proceedings in order to hang on to it. You might feel momentarily relieved you got what you wanted, but get burnt later on when the housing market takes a giant dip. Without other assets to fall back on, you could be left wishing you’d split things differently from the start, even if it meant a painful goodbye to something you loved.

Calculate Your Retirement Score

Everything from your everyday expenses to your mortgage can change drastically after a divorce, and it’s critical to sit down and make a new budget and plan for yourself so that you’re prepared for the future.

Once you have information about how much you may be receiving in benefits or how much you’ll have to spend on costs like healthcare, use Silvur to calculate your Retirement Score. It will tell you exactly how long your current level of finances will carry you into retirement, giving you the power to better assess your needs going forward and help you plan for the next phase of your life.

Getting into the Workforce

Whether out of financial necessity or simply wanting to stay busy during a tumultuous time, you might find yourself job hunting post-divorce. There are a few tips to keep in mind as you search:

Assess your job priorities. Before applying to any jobs, sit down and think about how your priorities have shifted post-divorce. You may have had more freedom in a job search before, but now, you must put your immediate needs first. Do you need healthcare? Do you plan on moving to a new part of town, making certain commutes tougher? Do you need to bring in more money now? This may require making some difficult decisions, but make sure you’re only applying to jobs that meet your needs, rather than wasting time on gigs that will only make your divorce transition more thorny.
Make work part of your divorce settlement. If you’re still settling your divorce and are realizing that certain resources would give you a better chance of succeeding in the workforce, you may be able to add to your divorce settlement. For instance, maybe you gave up pursuing an advanced degree years ago in order to raise children. You could work with your lawyer in order to ask for a higher upfront payment that would at least partially cover continued education, helping you raise your earning potential post-divorce and capitalize on your past contributions to your partnership.
Tap into your network. When friends and family often say, “Let me know if there’s anything I can do to help!” take them up on their offers. Be open with your connections about the fact you’re looking for work, and be specific about your needs. You may be surprised at how many people will emerge from the woodwork to help you find a position that suits you. Not every conversation will lead to a job offer, but whether it’s coffee with a friend who’s a recruiter or chatting with a small business owner who can offer advice on turning your side hustle into a more legitimate business, stay open to the possibility that forging these connections will eventually lead to the right position for you.

Turning to People Who Understand

When we spoke to Claudia about her divorce, she said one of the most difficult parts was the isolation she felt—not from the end of a union, but from her friends and adult children. She found that even though the people close to her wanted to be supportive, they just didn’t understand the specific challenges she was facing.

It’s frustrating and exhausting to hope that still-married friends and family will be able to offer concrete support, only to be disappointed again and again when they unintentionally say the wrong thing, leave you out of couple activities you used to love, or act differently toward you when your lifestyle changes.

You don’t have to completely abandon those friendships (unless you want to), but it’s better to understand those relationships can’t be your only source of support. Instead, check out resources like therapists who specialize in later-in-life divorces or support groups. There are tons of different types of groups that can fit your needs, whether you prefer to chat via Facebook group or meet up for local outings with people who are going through similar challenges. Search for divorce support groups in your area, or ask a therapist, church, or local community center for recommendations.

Divorce isn’t easy, but by going in with the right preparation, attitude, and resources, it’s often possible to set yourself up for a brighter future.

To understand your Social Security and healthcare choices, Silvur’s Retirement School has over 150+ digestible, easy-to-understand lessons that will help you navigate through your divorce. Check out these classes: