A divorce after 50, often called a gray divorce, has higher stakes than one at 30. There is less time to rebuild savings, retirement plans have to be split, and health insurance can suddenly become a question.
With a narcissist, add one more problem: many of them controlled the money during the marriage. You may not even know what you own. These ten steps help you see clearly and protect yourself. They are general information, not financial or legal advice.
#1 Get the full picture first
Make a simple list of every account and asset you know about: bank accounts, retirement plans, pensions, the house, cars, investments, life insurance and debts. Note the account numbers and the latest balances.
Copies of the last few years of tax returns are especially useful. They often show accounts and income you did not know about.
#2 Check your credit and build your own
You can get your credit reports free every week at AnnualCreditReport.com. Look for loans or cards you did not know about. If you have no credit in your own name, start now with an account or card that is only yours.
Ask your lawyer before closing joint accounts. Doing it at the wrong moment can cause problems.
#3 Open your own account and keep records
A bank account in your name only gives you a safe place for your own income where your state allows it. Keep receipts and statements. Never move or hide marital money on your own: courts can penalise it.
#4 Understand how retirement accounts are split
Workplace plans such as a 401(k) or a pension are usually divided with a court order called a Qualified Domestic Relations Order (QDRO). IRAs can be split through a transfer that is part of the divorce.
A dollar is not always a dollar. Money in a traditional 401(k) will be taxed when it is taken out; money in a Roth account usually won’t. A fair split looks at value after tax, not just the balance on the statement.
See also Therapy After Narcissistic Abuse: What Helps, Who to See and What the First Session Is Like
#5 Know your Social Security rights
If your marriage lasted 10 years or more and you have not remarried, you may be able to claim Social Security benefits based on your ex-spouse’s work record from age 62. It does not reduce what they receive, and they are not told.
The rules have details, so check with the Social Security Administration at ssa.gov before you decide when to claim.
#6 Plan for health insurance
If you are covered through your spouse’s employer, COBRA may let you stay on that plan for up to 36 months after the divorce, although you pay the full cost. Losing coverage also opens a special enrolment window on the Health Insurance Marketplace.
If you are close to 65, check how the timing fits with Medicare.
#7 Decide about the house with your head
Many women want to keep the family home, and sometimes that is the right choice. But ask yourself honestly whether you can afford the mortgage, taxes, insurance and repairs on one income.
Taxes matter too. When a home is sold, a single person can usually exclude up to $250,000 of profit from capital gains tax, compared with $500,000 for a married couple filing together, so the timing of a sale can make a difference. Ask a tax professional.
#8 Learn the basics of spousal support
Whether you receive or pay spousal support (alimony), and how much, depends on your state and your situation. For divorces finalised after 2018, federal tax rules changed: support is no longer deductible for the person who pays it, and the person who receives it does not pay federal income tax on it.
#9 Build a small professional team
Besides a family lawyer, consider a Certified Divorce Financial Analyst (CDFA) or a fee-only financial planner who acts as a fiduciary, meaning they must put your interests first. A tax professional can check the effect of each settlement option.
Ask every adviser how they are paid before you start.
See also How to Divorce a Narcissist: 9 Steps to Protect Yourself, Your Money and Your Kids
#10 Update everything when it is over
After the divorce, update the beneficiaries on life insurance and retirement accounts, and your will, power of attorney and health care proxy. Then set a new monthly budget for the life you are building.
Your checklist for a first meeting with a financial adviser
- A list of all accounts, assets and debts, with latest statements
- Tax returns from the last three to five years
- Retirement and pension statements, including any plan rules you have
- Your Social Security statement (from ssa.gov)
- Your current monthly spending and the income you expect after the divorce
- Health insurance options and their costs
- Questions about the house: keep, sell, or buy out
- Your goals for retirement and the next five years
Please remember: this article is general information, not financial, tax or legal advice. Rules differ by state and change over time. Talk to a licensed professional about your own situation.
