There is a growing trend that indicates the boomer generation - those around 50-70 years old - are choosing to divorce their spouses as they get older. According to Statistics Canada, this demographic has shown the greatest increase in divorces over the last decade.
What does this mean for older individuals? It means that more pensions are being divided, and more individuals are paying spousal support well into their golden years.
Re-evaluating Your Retirement Plans
For retired individuals, there is no more income coming into the marriage. The money coming into the marriage is likely from pension funds and savings, which would be divided equally as assets that belong to both individuals.
You may need to reassess your retirement goals, as a divorce after age 65 will most likely leave you with only have 50% of your retirement funds. You may need to reconsider:
- Where you're going to live
- What properties you're going to buy
- How often you travel
- Any indulgences you want to invest in
When Both Parties Are Still Working
If both parties are still working, federal spousal support guidelines may still apply. In many cases, individuals who divorce later in life are generally at their peak earning capacity. This means that, if the salaries are generally close in range, the equalization payments may not be very substantial.
Indefinite Spousal Support Payments
Also, if you have been married for over 20 years, spousal support payments are indefinite. The Government of Canada realizes that having couples rebuilding their finances later in life can be hard, especially when considering how close older individuals are to retirement.
Also, if you remarry later in life, and then decide to end this second marriage, indefinite spousal support payments may also apply. However, there are many other factors that come into play for ending second marriages, such as:
- The age of the higher earner
- Proximity to the age of retirement
- The length of the second marriage
When Only One Person Is Collecting Pension
This scenario can be tricky. When does a couple make the distinction that a pension is family property, or a source of income? In this situation, it can be difficult to determine how to divide a pension when one person is already receiving it, and the other is still working.
In this situation, it's best to contact a family law lawyer. Protecting your pension is crucial, and needs to be valued and assessed with a more nuanced legal eye. There are laws in place on how to divide pensions between spouses, and it's important that you understand what your rights are, and how you can protect what you've worked hard to accumulate.