Divorcing at 63 after 38 years at home. Will I have anything to retire on?

The question

An illustrative letter.

The answer

My dear, thirty-eight years is a lifetime, and ending a marriage at 63 is one of the hardest things a person can face. Please hear this before anything else: the years you spent raising four children were real work. It was work that made his career possible, and the law in most states, including yours, recognizes that. Whose name is on the accounts is not the end of the story.

Is the property really all his?

Usually not. In most states, property and savings built up during a marriage are treated as marital property, no matter whose name they are in. That can include retirement accounts, pensions, the house, savings and investments. Nebraska divides marital property in a way the court finds fair and reasonable. Nebraska law tells the court to consider each spouse's contributions to the marriage, including the care and education of the children and any interruption of a career. Your years at home are part of that record.

A divorce attorney is essential here, and a CPA or a financial planner who works with divorcing couples can help you understand what each asset is really worth, after taxes.

Can I get Social Security on his record?

Yes, if you meet the rules. Social Security pays benefits to a divorced spouse who was married ten years or more, is currently unmarried and is at least 62. If your former husband has not yet applied for his own benefits, you can still claim on his record once you have been divorced for two years in a row.

The amount can be up to half of his full retirement age benefit if you wait until your own full retirement age, which is 67 for anyone born in 1960 or later. Claim earlier and it is permanently reduced: at 62, it can be as little as about a third of his benefit. If your own work record would pay more, Social Security pays you the higher amount.

Two more points bring many women real comfort. Your claim does not reduce his benefit, or the benefit of any future wife. And if he dies before you, a divorced widow from a marriage of ten years or more may qualify for survivor benefits, which can be as much as his full benefit. You can see estimates for his record and yours by calling Social Security or visiting a local office, and in your own account at SSA.gov.

How are retirement accounts divided?

His 401(k) or pension is usually divided with a court order called a qualified domestic relations order, often shortened to QDRO. It tells the plan to pay part of the account to you. Money you receive this way can usually be moved into your own IRA without tax, and payments made to a former spouse under such an order are exempt from the 10 percent early withdrawal tax.

IRAs are divided differently, by a direct transfer between accounts under the divorce papers, which is also tax free when done correctly. Ask your lawyer to make sure the order or transfer is written and filed properly, because a mistake here can cost you dearly or delay your share for years.

What about health insurance before Medicare?

This matters a great deal at 63. If you are covered by his employer's health plan, divorce usually lets you keep that coverage through COBRA for up to 36 months, long enough to reach Medicare at 65. You will pay the full premium yourself, so build it into your budget. You must tell the plan within 60 days of the divorce, so put that date on your calendar. A Marketplace plan is the other option, and depending on your income, you may qualify for help with the premiums.

Will there be alimony?

It depends on your circumstances and your state's law. Courts often consider the length of the marriage, each spouse's contributions, and whether one spouse gave up earning to raise the family, all of which apply to you. For divorces finalized after 2018, alimony is generally not counted as taxable income to the person receiving it under federal law. Your attorney can tell you what is realistic.

What do I do now?

Start gathering information, quietly and calmly. Make copies of tax returns, bank and retirement statements, pension papers, mortgage and deed records, and insurance policies. Open a bank account in your own name if you do not have one, and check your credit report so you know where you stand. The checklist further down lists what to bring to your lawyer.

Then give yourself room to breathe. Decisions made in the first raw weeks are rarely the best ones. Take each step in order, and ask every question until you understand the answer.

Will I be all right?

Many women in your position find that between a fair share of the marital property, Social Security on his record and careful planning, they have more security than they feared. You may need to live differently than before, and that is a real loss. But you are not starting from nothing. You are starting from thirty-eight years of contribution, and the law counts them.

One thing to do this week

Make copies of your recent tax returns and every account statement you can find, and open a bank account in your own name.