How to Plan for the Financial Impact of a Late-in-Life Marriage or Divorce

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." — Charles Darwin

Late-in-life marriage or divorce can have a surprisingly significant financial impact. Just when people start to feel settled in their financial plans, a major life event like remarriage or separation can disrupt long-term strategies. While these decisions are often emotional, it's important to recognize their practical consequences—especially when retirement is approaching or already underway.

Let’s begin with Social Security. Many people don’t realize that remarrying later in life can affect eligibility for certain benefits. For example, if you were married for at least 10 years and haven’t remarried before age 60 (or age 50 if disabled), you may be entitled to Social Security benefits based on your ex-spouse’s record. But if you remarry before that cutoff, you forfeit that option. I’ve seen cases where people unintentionally gave up tens of thousands of dollars in lifetime benefits simply because they weren’t aware of the rules.

Medicare can also get more expensive. If you marry after 65, your income may be evaluated jointly to determine whether you owe IRMAA surcharges—additional premiums for Parts B and D. If both spouses have moderate to high income, even if they managed their healthcare costs well as individuals, they might end up paying significantly more in premiums as a couple.

The tax implications of late-in-life marriage can be just as complex. Many retirees and near-retirees rely on predictable income from pensions, retirement accounts, and investments. Filing jointly can sometimes increase your overall tax burden—especially if both spouses have significant income. You may find yourselves in a higher tax bracket, lose eligibility for certain deductions, or face increased capital gains taxes.

Another area that requires clear thinking is asset protection. When people enter a new marriage with real estate, retirement savings, or other assets, it's essential to have an honest conversation about how those assets will be treated. A prenuptial agreement may not be romantic, but it can provide clarity and help avoid unintended consequences. The goal isn’t to be adversarial—it’s to make sure everyone’s interests are protected.

For those going through a divorce later in life, the division of retirement accounts like IRAs, pensions, or annuities can create additional hurdles. These assets often carry tax consequences, and splitting them without careful planning can trigger unnecessary taxes or reduce future income. Divorce settlements sometimes also fail to address long-term care responsibilities, leaving questions about who will make decisions or cover costs down the road.

Despite these challenges, there are effective ways to plan ahead. Options like Roth conversions, using health savings accounts, establishing trusts for blended families, or creating cohabitation agreements can offer more flexibility and control. These tools can help align your financial plan with your new life circumstances.

Ultimately, the key is not to rely on general advice or assume everything will work out automatically. Whether you’re marrying, divorcing, or cohabiting later in life, it’s worth sitting down and examining how this change affects your financial picture. Ask yourself: Will my new marital status affect my Medicare premiums? Should I convert some of my retirement savings to a Roth IRA now? Are my estate documents up to date? What happens to the house if one of us passes away?

These are not just personal questions—they are financial decisions with lasting impact. Addressing them proactively can help preserve the financial stability you’ve worked hard to build.

If you're facing a major relationship change later in life, take the time to plan. You don't need to have all the answers yourself, but you do need to ask the right questions—and work with someone who knows how to find them.