My regular trips to Florida to hang out with my parents, ages 90 and 94, always leave me with some insight as to what can make life enjoyable for really senior people (as distinguished from so-called "seniors" like me who get into movies and fly Southwest at special rates - but who don't feel all that old.)
Although there are many alternatives for people of that older stage in life, it is ideal to accumulate enough in financial resources to be able to live in a nice senior living community if you so choose. My parents have a nice apartment in a larger facility with a central dining room and all kinds of activities and resources available. Conceptually, it's like having an apartment in a nice hotel.
While I was there last week, Al and Tipper Gore's separation announcement was in the news, and I was reminded that not every couple makes it to 67 years of wedded bliss, like my parents - or 37 years like me, I should hasten to add. However, The Wall Street Journal's Jeffrey Zaslow wrote a well-researched article on the growing statistic of couples divorcing after 40 years. We could call it a delayed manifestation of the "seven year itch."
Zaslow's article quoted a variety of attorneys and therapists familiar with the conditions that lead to the 40-year divorce. It's boredom as much as anything, and people wanting to go in different directions.
None of this should come as a surprise. Forty years ago, Transition Institute, founded in Berkeley by Jack Crickmore, now deceased, sought to help people understand the place for divorce and the shifting sands of relationships over long life spans. It's wonderful when couples grow together, but it just can't always happen.
But getting to the point: Divorce late in life can complicate retirement planning. It will cost more for two people to live separately (two cars, two homes or apartments, etc.) Splitting a 40-year accumulation of assets puts new financial pressure on divorced couples who need the resources to reinvent themselves. According to the Journal article's interview with a divorce lawyer, the recession put the brakes on many divorces that were in the works, so money is definitely an issue in these decisions.
Leave it to the 401(k) phenomenon to come to the rescue. Many couples probably forget that a currently non-working spouse who takes even a part-time job can deposit the first $16,500 into a retirement plan plus the $5,500 catch-up if they are 50 or older. There's no percentage of income limitation anymore. You can deposit 100 percent of the first $22,000 you make. This money can all be invested tax-free instead of being taxed at what would have been the couple's highest marginal tax bracket (probably 36 percent at least.) If laying the groundwork for divorce is seen as a worthy financial goal, a couple could be contributing as much as a combined $44,000 a year into their 401(k) accounts - $22,000 for each. With normal annual stock market returns of 10 percent, this would grow to over $700,000 in that period. Ten years will go by quickly. Look at the last 40 years if you need a reminder.
Who knows? Perhaps extra money in retirement accounts would ignite a spark in a marriage that would otherwise have faltered. Financial security can help people feel more relaxed and secure. They can become better listeners. Then, with a golf trip here, a little jewelry there, that partner for life can sometimes become worth talking to for more than 16 minutes over dinner. My parents chat for hours.