Even though divorce rates have seen an overall decline, they are paradoxically increasing among individuals aged 50 and above. A 2012 study published in the Journals of Gerontology labeled this growing trend as “gray divorce,” reporting that the divorce incidence in this age group had doubled from 1990 to 2010. Subsequent research conducted by Bowling Green State University’s National Center for Family & Marriage Research continued to examine this trend. Their findings noted that the rate of divorce among individuals aged 65 and older surged threefold between 1990 and 2021.
What motivates individuals to seek divorce later in their lives? Longevity is certainly a contributing factor. With American women living to an average age of 79, many may choose to end an unsatisfying marriage around the age of 50 instead of enduring an additional 29 years of unhappiness.
The financial aspects of gray divorce
Nancy Hetrick, a certified divorce financial analyst and the CEO of Smarter Divorce Solutions, notes that she frequently observes differing aging patterns within her clients—men often adopt more sedentary lifestyles, while women are inclined to stay active and involved as they grow older. She indicates that the Women’s Liberation Movement has also played a significant role in this shift. “When I consult with these women individually, they express, ‘I’m finished. I refuse to play the submissive role any longer. I’m no longer willing to be someone else’s caregiver or allow anyone to dictate my choices,’” she recounts.
Moreover, Hetrick highlights the impact of the COVID-19 pandemic on divorce rates—when couples were confined at home, the dynamics of their relationships became starkly evident.
Regardless of age, divorce can lead to financial upheaval, but the stakes are especially high for those nearing or already in retirement. When couples separate, their shared income and assets become divided, significantly affecting their financial stability—particularly for women.
Chris Chen, a certified divorce financial analyst based in Boston at Insight Financial Strategists, observes that his clients often worry about their financial security post-divorce. “Typically, it’s the wife who earns less,” he explains. “She’s understandably apprehensive about her future financial situation.” Therefore, divorce, according to Chen, is “a brave decision.”
The financial implications of divorce vary considerably between those experiencing ‘early gray divorce’—before retiring—and ‘late divorce’ during retirement. However, certain trends can still be identified.
Gray divorce for those in their 50s
Individuals in their 50s are often still actively earning. This aspect means their divorce situations differ from those who are retired. “They’ve been preparing for retirement as a couple,” Hetrick remarks. “Now, each partner ends up with half the assets. They’re edging closer to retirement but find themselves at a disadvantage. Consequently, they may need to work longer or save more to achieve their retirement goals.”
Some might assume child support is irrelevant at this age, yet Chen argues that increasing numbers of women are having children later, making child support a relevant issue in divorces among those in their 50s.
In this demographic, even if one spouse earns more, the likelihood of receiving alimony diminishes. Additionally, alimony is no longer seen as a lasting solution. “Alimony is becoming obsolete,” Hetrick states. Divorce used to symbolize the breach of a lifelong contract, with alimony aimed at compensating for that separation.
“Fast forward half a century. Women are no longer financially reliant on men,” Hetrick continues. “Multiple marriages have become commonplace. The notion is no longer ‘until death do us part,’ but rather ‘until it’s no longer enjoyable.’ Thus, in most states today, alimony is granted solely on a temporary basis to aid the recipient toward becoming self-sufficient.”
Gray divorce and the quest for self-sufficiency
Judges are responsible for determining the amount necessary for a spouse to attain self-sufficiency, which isn’t always tied to their standard of living during the marriage. Alimony should be viewed as a bridge to a new beginning and typically allocated for a brief period, allowing the recipient to further their education or acquire job skills to improve their employability.
“The availability of health insurance is a crucial consideration for this age group,” notes Hetrick. Often, one spouse provides health coverage through their employment. Post-divorce, the other party may find themselves without insurance. If the divorce occurs prior to Medicare eligibility, that individual may confront significant costs for securing health coverage. Additionally, older age often comes with preexisting or chronic health issues. It’s essential to budget for health insurance when calculating spousal support and assessing whether the asset division will sufficiently cover future expenses.
Gray divorce impacting retirees
In retiree divorces, both parties are usually not generating income, which eliminates spousal support as a consideration. Instead, the focus shifts to the distribution of assets. If the division of property proves insufficient for sustaining each partner in their retirement, the separating couples must think creatively.
Hetrick emphasizes another critical topic: Social Security. In cases where one partner has dedicated considerable time to home-making instead of pursuing employment, their Social Security benefits could fall significantly short compared to their spouse’s, regardless of their later employment history. This disparity might lack equity; therefore, sharing these benefits could enter negotiations during the divorce process.
Marital real estate considerations
Housing arrangements are vital to settling. If one partner remains in the family home, a reverse mortgage might be a feasible option—Hetrick assures that these are now fully regulated and secured, contrary to the predatory practices of the past. The departing spouse may also contemplate a reverse mortgage to utilize the equity accrued in the home. “It offers an excellent range of flexibility and inventive solutions for these couples,” she states.
Hetrick suggests that older couples should evaluate if retaining a large residence serves their best interests. A condominium or independent living arrangement could be a more suitable choice for this stage of their lives. “Perhaps this timeframe is genuinely an opportunity for both individuals to reimagine their final chapter,” she reflects.
Updating estate plans is also crucial. If one spouse remarries after a gray divorce without revising their estate plan, their new partner could potentially claim all their assets. This oversight could leave both their preceding spouse and any children, whether adult or minor, from the prior union in a precarious situation.
Healing post-gray divorce
Regardless of their clients’ age group, Chen poses three essential questions during consultations:
- “What is their current financial state?”
- “What will their finances look like at the time of divorce?”
- “What will their financial situation be like 15 years down the line after the divorce?”
To address these inquiries, separating partners must first ascertain their gross and net income levels, what assets they possess (including retirement accounts), and their home equity. Evaluating the financial landscape of both partners is a prerequisite in legal proceedings. It’s also a critical exercise for determining an equitable resource division.
Asset division strategies
Couples must also engage in discussions regarding asset distribution. This conversation can be heavily influenced by their location. In community property states, assets, debts, and properties are divided equally, while equitable distribution states take a broader stance on fairly allocating financial properties.
“The financial success of a divorce hinges on whether couples achieve their desired situation 15 years after the divorce,” Chen explains. Attaining those goals necessitates careful planning, whether it involves advocating for temporary alimony, listing a divorcing partner as a dependent on health insurance, leasing the former marital home to generate income, or downsizing. No matter the chosen route, a financial divorce expert serves as an essential resource.
“For those divorcing after age 65, it is critical that they consult a financial professional,” Hetrick emphasizes. “Errors at this stage can be catastrophic—it could lead to severe future consequences.”
