For years, you assembled the blueprint for retirement life with your spouse. You saved more than enough in your retirement accounts. And to get the ball rolling, before your retired, you even invested in vacation property that likely would become your permanent home in Florida. Only a few years away from retirement, you are coming down the home stretch.

As it turned out, all that planning was to no avail. Your spouse abruptly decides to file for divorce, leaving you in shock. The future you had planned together suddenly vanishes. Now, you must pick up the pieces of your shattered life, including wondering whether you ever will be able to retire and whether you will run out of money.

Divorce rates increasing in 50 and older age group

For some couples, “gray divorce” is not such a surprising development. Your adult children have left home. Now, you find yourself stuck with a spouse whom you have little in common with, and a person whom you wonder whether you really like. Maybe it is time to bolt.

But there will be some consequences, mainly in the fact that a gray divorce likely endangers retirement savings for both spouses forced to scuttle any plans and pursue new and solo directions.

The divorce rate of U.S. adults who are 50 and older has doubled since the 1990s. In another statistic related to “gray divorce,” the divorce rate of people 65 and older has tripled, according to the Pew Research Center.

Advice on retirement plans

Now that you are in the midst of a gray divorce, you must understand that your retirement accounts – 401(k) and 457 plans, IRAs, 403(b)s and pensions – more than likely must be divided equally. Here is some advice that may help:

  • Ensure that the IRA transfers are properly done to avoid additional taxes and penalties. Work with an attorney who focuses on Qualified Domestic Relations Orders (QDROs).
  • Do not give up too much financially – namely your marital assets from retirement accounts — in order to remain living in your house. If you do, your home essentially represents your retirement account. But if you experience a medical emergency or the mortgage market tanks, you are in trouble.

Your retirement will happen, but without your spouse. The new outcome promises to be much more different than what you had envisioned.