The Silver Divorce: 4 Mistakes That Can Affect Retirement

By Nancy Fagan,

The Divorce Help Clinic, LLC

Silver couples are divorcing now more than ever.

The divorce rate among 49- to 67-year-olds has grown more than 50 percent according to the latest statistics. And, unfortunately, many of these newly-single baby boomers lose much of their retirement in wake of divorce.

According to a

recent article



, silver couples are warned that if the right steps aren’t taken to secure financial futures in the wake of a divorce, you may be stuck with reduced income or even a part-time job in your sunset years.

The latest study at ING found that divorced people are less financially prepared when it comes to retirement versus married couples. On average, divorcees saved $11,000 less for retirement than their married counterparts.

Retirement is an ongoing fear most couples have in divorce proceedings. Women fear being able to afford retirement in general while men fear it will be delayed.

Retirement can be preserved when you make the right financial decisions with the help of a divorce mediator. When it comes to divorce, a mediator aims for mutual collaboration and can be far more productive in splitting assets so no one gets left out in the dust.


While it’s true that real estate is likely to be one of the more valuable financial assets in a divorce, it isn’t the end-all when it comes to dividing up personal property. Compared to retirement savings such as a 401(K) or IRA, real estate can be a risky asset considering future of values are unknown and unexpected expenses are sure to be a part of the equation.

When divvying up assets, be sure to consider the potential appreciation of the home compared to financial assets in a 401(K) or IRA. In some cases, depending on the market, the retirement funds could be a more predictable choice.


Assets like a 401(K) and IRAs have tax implications when money is withdrawn. On the other hand, Roth IRAs aren’t taxed when funds are withdrawn since money is already pre-taxed. If one person receives a Roth IRA and another receives a 401(K), those assets may not be equal due to tax implications. This difference can be critical to divvying up assets, especially if in light of withdrawing funds.


In some cases, you may want to withdraw money from a retirement account as opposed to rolling it into an IRA. Under the qualified domestic relations order (QDRO), an individual under age 59 ½ can withdraw money from an ex-spouse’s 401(K) or 403(b) without the 10 percent tax penalty. Withdrawing funds in this case may end up being a better choice as opposed to rolling cash over to an IRA, especially as unexpected expenses arise through the divorce process.


Individuals who qualify under the QRDO act tend to withdraw too much money “just in case.” Try not to take out too much money if you can help it – preplanning your next 2 to 3 years can help you determine the right amount of cash. Remember, you’ll need to eventually live off this money for 20 to 30 years. It may be tempting to take out a large sum now, but the complications of withdrawing too much money will catch up to you eventually. Be conservative if you can.


Navigating through rough waters is sometimes a part of divorce; but it doesn’t have to be that bad. In many cases, divorce, when done by way of mediation, is by far more productive in terms of divvying assets. Mediation doesn’t depend on intimidation to get the best result for either party; therefore, both individuals end up feeling good about the final result. Mediation ensures that both individuals come out on top so retirement isn’t compromised – and that’s a win-win for everyone.

For more information on divorcing through mediation, log onto

or feel free to give my clinic a call at (858) 863-3380.

Nancy Fagan is the owner of The Divorce Help Clinic LLC (Divorce Mediation & Planning Services), best-selling author and divorce expert. If you have questions about San Diego divorce or mediation, make sure to stop by any Wednesday for the Divorce Information Drop-in Clinic, 11:30-1 pm (Free). This is NOT a class. Drop by anytime for a private 15 minute meeting,