It’s no secret divorce is trending, but you may be surprised to learn the most likely group to get divorced is baby boomers. Yep, baby boomers are divorcing rapidly. There’s a lot here so I called up Jim Reed of BGD Legal, who also happens to be the Pete the Planner Radio Show attorney, to give us insight into this phenomenon.
What interests me the most about this issue is the implications on retirement. Baby boomers are either already in retirement or pretty close to it. The financial impact of divorce can throw anyone off, but being so close to retirement means the threat of financial ruin is real.
But let’s go back to how and why baby boomers are divorcing. Here’s how I see things happening, which was confirmed by Jim, baby boomers are coming into their own after the kids leave the house. They married young, had kids young, and more often than not the wife stayed home with the kids. Fast forward to now, with the kids out of the house, one or both partners are more free to express their dissatisfaction. According to Jim, it’s pretty evenly split on which partner initiates the split. But regardless of who initiates, the major issue is one spouse is income earning and the other is not. This is where things get tricky. Baby boomers especially, planned retirement as a ‘we’. The primary income earner pushed some of his income into a retirement fund, which the non-income earner planned to share in retirement.
So what happens when they split? Thankfully, the law makes it fairly easy to divide retirement funds, but that isn’t always enough. Jim advises his clients, from the very beginning of their relationship transition, to think about how they can earn income. Even if they have been out of the work force for decades.
Whether you are a baby boomer or your parents are baby boomers, the likelihood of divorce in this age range is growing. Divorce is a financial earthquake. You can survive it, but only if you protect yourself.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.