Gray Divorce Can Impact Public Benefits

Gray divorces, divorces involving spouses over the age of 50, have hit an all-time high in our country. Last week we shared some advice on estate planning needs when divorcing. This week we will help you figure out how a gray divorce can impact public benefits such as social security, nursing home Medicaid and VA benefits.

Gray divorce, women, and retirement

Aging adults, especially women, should consider how a divorce may affect their retirement and long-term care options. Women are often victims of the gender wage gap. For example, today’s 75-year-old was making 60% of her male counterpart’s salary. Even as recent as 2020, women earned $.81 for every dollar earned by men. These statistics are even more drastic for Black, Hispanic, and Native American women. Over a 40-year career, women earn on average $900,000 less than men. A woman has a median retirement balance of $30,000 and are often less likely to work jobs with retirement benefits. In addition, women may have been out of the workforce for many years to care for their children thus affecting their career progress and earning potential. Women divorcing after age 50 have a 45% plunge in their standard of living (compared to men at 21%). These facts are quite bleak and may cause women to become impoverished with later life divorces.

Further complicating things for women going through a gray divorce is they outlive men by 5 years. They also make-up 2/3 of nursing home residents. Women must plan for a longer retirement and the likelihood they may require long-term care.

Gray divorce and public benefits

It is essential to your future that you maximize your benefits such as Social Security. Divorced spouses may be eligible to receive Social Security benefits based on their former spouse’s earning record. *Some of these rules changed in 2015 so please check regarding your situation. Your benefits through your former spouse may be greater than your benefits on your own work record. Also, if a former spouse is deceased, divorced spouses may be eligible for survivor benefits.

As we mentioned, divorce can limit your access to other public benefits. There are more limited Medicaid planning options available. You are also no longer entitled to the Medicaid Community Spouse Resource Allowance (CRSA) after a divorce nor are you entitled to spousal diversion. Lastly, there is no longer an opportunity to receive VA spousal benefits after a divorce.

Obviously, divorce is hard in many ways including emotionally and financially, but the expert team at Hurley Elder Care Law can help work with you to plan for your elder law and long-term care planning needs. Call us today at 404-843-0121.