Sep 11, 2025
Divorce is often a stressful and difficult situation for couples, but what happens when you’re divorcing in your 60s and close to retirement age?
To make this scenario more tangible, imagine Mark and Jen, a San Diego couple who recently split after 35 years. Mark, 63, is worried about what the divorce means for his finances as he approaches retirement.
Advertisement
California is one of nine U.S. states where generally everything acquired during the marriage is divided equally in a divorce, whether real estate or assets gained from retirement accounts. [1]
In Mark’s case, there are a few more complications.
Why the math feels worse than 50/50
On paper, Mark gets roughly half of the couple’s joint assets, but feels he’s getting less than his fair share. Here’s why:
Retirement savings cut in half: Mark’s 401(k) and IRA balances are split with his ex, immediately shrinking the nest egg he thought he’d live on.
House sale deferred: He’s staying with his 20-year-old son in their California home while his ex is moving out. Mark won’t see his share of the home’s value until it sells.
Different financial situations: Mark is still working and earning a salary, while his ex-wife is retired. That means she’s drawing from assets immediately, while Mark is still in accumulation mode, but he feels more pressure to “catch up.”
The reality is that both spouses are under pressure. Housing costs, like utilities, insurance and maintenance, double for each of them. As they age, their healthcare risks rise.
Advertisement
Mark and Jen may have enough to get by in retirement, but not enough to maintain the lifestyle they envisioned together. Mark has a few financial gaps to fill.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Putting his income to work
Mark’s portfolio generates less passive income than it did a few years ago. He can’t unlock his home equity until he sells. And he has to stretch his lower retirement savings further now he’s paying double for housing, utilities, insurance and maintenance.
Fortunately he’s still working, which gives him some time to rebuild the pot. Here’s what he can do.
Trim lifestyle spending: If Mark pushes the house sale forward, downsizes to a more affordable home and cuts down on discretionary spending, he can redirect more of his paycheck into investments.
Rethink retirement age: Working a few extra years, say until he is 70, could boost Social Security benefits and extend the growth of his investments.
Advertisement
Prioritize liquidity: Since his house equity is tied up, Mark should focus on building taxable brokerage and savings accounts for flexibility.
Max out catch-up contributions: Once Americans are over the age of 50, the government lets them contribute extra funds into retirement accounts over standard limits. This could help Mark rebuild his nest egg after the divorce.
Leverage HSAs: Health Savings Accounts offer triple tax advantages: contributions are tax-deductible, growth is tax-free and withdrawals for qualified medical expenses are tax-free. Using an HSA strictly for qualified medical expenses in retirement frees him up other retirement funds for living costs.
Dividing assets later in life leaves both parties stretched thinner than expected, but with careful planning, there’s still time to rebuild a retirement strategy that provides a steady income.
Article sources
At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.
We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.
[1]. Justia “Property Division Laws in Divorce: 50-State Survey”
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Jessica is a freelance writer with a professional background in economic development and small business consulting. She has a Bachelor of Arts in Communications and Sociology and is completing her Publishing Certificate.
