Gray divorce

Living on retirement income after a gray divorce

Thirty years of marriage, a paid-off house, a pension and Social Security, and now two households on income that was planned for one. Here is how Colorado splits it, what the government does and does not do, and how the house fits.

Call the divorce team 303-955-4220 Gray divorce in Colorado Downsizing after divorce

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Pensions

Split by QDRO, not by trust

The marital share of a pension or 401(k) moves to the other spouse tax-free under a court order drafted with the decree. Colorado PERA needs its own order within 90 days.

Social Security

The 10-year rule

Married 10 years or more to the decree date, unmarried, 62 or older: up to half of the ex’s full benefit if it beats yours. It does not reduce theirs.

Health

Medicare or COBRA

Under 65, COBRA up to 36 months or the marketplace; at 65, Medicare on your own record or your ex’s if married 10 years.

The house

Equity is the biggest asset

A paid-off house is still a buyout. HELOC, reverse mortgage at 62 and up, trading retirement assets, or sell and split.

The short answer

Colorado divides everything built during the marriage, including the pension and the house, equitably; it does not divide Social Security, but a marriage of ten years gives each of you a claim on the other’s record. The mistake in a gray divorce is keeping the house and starving on the income. Trade the house for the retirement assets, or sell it and split, and let the monthly number decide the address.

The income after

Pension and 401(k)The marital portion (contributions and growth during the marriage) is divisible; a QDRO pays the ex-spouse directly, tax-free at transfer, taxed when withdrawn. Value it after tax: $300,000 traditional is worth about $221,000.

Social SecurityTen years married, unmarried now, 62 or older: up to 50 percent of the ex’s full retirement benefit if higher than your own; divorced at least two years if the ex has not filed. Survivor benefits at 60 if the ex dies.

MaintenanceThe guideline still applies after 60; long marriages produce long terms, sometimes to the payer’s retirement. Tie it to the retirement date in the decree.

Health insuranceDivorce is a COBRA event, up to 36 months. Medicare at 65 on your own record or a 10-year ex-spouse’s record, at no cost to them.

TaxesFiling status changes, withholding on pension and Social Security changes, RMD timing on divided accounts. A CPA visit the year of the decree pays for itself.

The house on a fixed income

A paid-off $650,000 house is $325,000 of equity to each of you, and no monthly income. The keeping spouse buys the other out with a HELOC (a payment, on a fixed income), a reverse mortgage at 62 and up (no payment, but compounding interest and real costs), or by giving up retirement assets valued after tax. The selling spouse takes the cash and, often, a condo or 55+ home with an HOA of $200 to $300 a month. The senior property-tax exemption (65 and older, 10 years on title and in residence) stays with the qualifying senior who stays. From a big house to a condo.

Questions people ask

Will I lose my ex’s Social Security if I remarry?

A divorced-spouse benefit ends on remarriage before 60 (survivor benefits survive remarriage after 60). Your own record is unaffected.

Can my pension be split if I am already receiving it?

Yes. A QDRO or PERA order can divide payments in pay status. Get the plan’s procedures before the decree is drafted.

Should I keep the house or the retirement account?

Compare after tax and after the cost of carrying the house. Most people over 60 on one income are better off with the liquid assets and a smaller home. We will show both columns, free.

Is a reverse mortgage a good way to buy out my spouse?

It can fund a buyout with no payment at 62 and up, but interest compounds, equity declines and costs are real; a HUD counseling session is required, and it should be a decision made with a CPA. Keep the house.

Hard times, handled quietly

We have sold underwater houses, negotiated short sales and stopped foreclosure clocks for divorcing owners. Quietly.

A divorce with no equity, two incomes that just became one, and a lender who does not care about the decree is the file we see most in a down year. The Kenna divorce real estate team, led by Damon L. Chavez, Certified Real Estate Divorce Specialist, runs the numbers first and tells you the truth: sell, short sale, hold, or fight the foreclosure.

Your information stays with us. We will not contact you without your permission, and nothing here is logged to an account.

A written net sheet with the house sold, short-sold and kept

The Colorado foreclosure timeline against your court dates

A lender who will tell you the truth about a refinance on one income

The hotline, legal aid and fee-waiver numbers, free

Talk to the team, free

Where to go next

Plain-language education, not advice. Divorce Decisions is published by The Kenna Real Estate Group at Keller Williams DTC, a real estate team. Nothing here is legal, tax, lending or financial advice, and reading it does not create any professional relationship. Colorado law and lender rules change; confirm anything that matters to your case with a licensed Colorado attorney, a tax professional, and your lender. See our full disclaimer.

Call your Colorado divorce agent

Questions about the house, the deed or the decree?

Call us today to talk through your situation and how we can help. A live person answers. Not a robot, not a phone tree.

Call today 303-955-4220 Download the free divorce-home guide

Ask about the house and the income

Tell us the house, the pensions and the ages. We will send both spouses the same two columns: keep the house, or take the retirement assets, free. Nobody is contacted without permission.

Call or text 303-955-4220

A live person answers. Not a robot, not a phone tree. Prefer email? homes@kennarealestate.com