Divorce has a financial impact no matter the age of the spouses. But divorcing very near or during retirement — known as gray divorce — can take a much bigger financial toll. This is especially true if the marriage has been long term and the couple lived primarily off one income.

When a married couple structures their finances around living together the rest of their lives, dividing the financial resources they’ve accumulated in order to live separately will generally result in a reduced lifestyle for both spouses. This article will address cash flow issues of gray divorce.

Pension benefits that are received on a monthly basis are sometimes a major asset for the household.

For instance, if a couple receives $2,000 a month from a pension and they divide it equally, they have each basically taken a 50% cut in household cashflow.

If there wasn’t a survivor benefit chosen at the time the pension started paying, when the spouse who worked for that employer dies, there will be no pension benefit for the survivor.

Some folks fill this deficit with life insurance, but that increases the cost to the couple and many people won’t qualify for life insurance later in life.

There might be benefits with Social Security, but they also might not completely make up for the cost of maintaining two households.

There are intricacies to this benefit, but here are some basics.

If there has been one earning spouse in the marriage and the couple has been married for at least 10 years, the non-earning spouse may be entitled to a spousal benefit of half of their former spouse’s Social Security benefit.

Just as if they were still married, the earning spouse still will receive full benefits. And if the earning spouse dies before the non-earning spouse, the surviving divorced spouse will receive the full Social Security benefit of the earning spouse going forward. There are similar benefits in a situation with a spouse with high earnings and a spouse with lesser earnings.

Spousal maintenance — another name for alimony — is a provision for providing cash flow from one spouse to another to allow some equity in the ability of each spouse to maintain a comparable lifestyle after a divorce.

Colorado has a guideline for determining spousal maintenance. Part of the guideline recommends that in a marriage of 20 years or more, spousal maintenance can last until retirement age or beyond.

It’s common for spousal maintenance to end when either or both parties reach retirement age.

But spousal maintenance could go past retirement age if there is a major difference between the cash flow of the spouses. If both parties are younger than retirement age, both are generally expected to work to the extent of their capabilities.

Next week we’ll look at the impact of dividing assets and debts in a divorce later in life.