How “Gray Divorce” Can Affect Your Retirement Plans

How “Gray Divorce” Can Affect Your Retirement Plans“Gray divorce” is a term used to describe the divorce of two married adults that are 50 years of age or older. Gray divorce is similar to divorce among younger adults in many ways, but there is one major difference. If a younger couple ends their marriage, it is rare for their divorce to significantly impact their retirement plans. However, this is not the case for older divorcing couples. Here’s how gray divorce can affect your retirement plans:

How Retirement Accounts Are Divided

To understand the impact of gray divorce on retirement plans, it’s important to learn how retirement accounts are classified and divided during a divorce. Retirement accounts such as 401(k)s, IRAs, and pensions can be classified as marital assets. However, if some of the money in these accounts was accrued prior to the marriage, this portion is not considered a marital asset.

New Jersey is an equitable division state, which means both spouses are entitled to a fair portion of the marital assets in the event of a divorce. If a retirement account is classified as a marital asset, it is subject to equitable division during divorce proceedings. As a result, a gray divorce could leave you with a fraction of the money you initially planned on using during your retirement.

How the Division of Retirement Accounts Affects Older Adults

Since older adults are closer to retirement than younger adults, the division of retirement accounts has a greater impact on their plans. Older adults do not have as much time to replace the money that was awarded to their spouse during the divorce. Many people who have gone through a gray divorce are forced to rethink their retirement plans altogether to ensure they have enough money to live off of for the rest of their lives.

How to Protect Your Retirement Plans

If you’re worried about the impact of divorce on your retirement plans, it’s important to choose the right attorney. This is a very complex area of family law, so choose an attorney who has plenty of experience handling gray divorce cases. An experienced attorney can ensure your retirement accounts are fairly distributed while also protecting your financial freedom.

Don’t let divorce get in the way of your retirement plans. Let the dedicated divorce attorneys at Williams Law Group, LLC fight tirelessly to protect your retirement accounts and your future. Call our office at (908) 810-1083, email us at, or contact us through our confidential online form to schedule a consultation.

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