Reality and Survival of Gray Divorce
Divorce of couples over age 50, Gray Divorce, has become more commonplace. 36% of divorces are Gray Divorces¹. As our life expectancies continue to increase, our attitudes about divorce continue to evolve. And while it’s not still rapidly increasing, Gray Divorce is likely here to stay.
There are many issues that must be considered in Gray Divorce. One of the sad facts about divorce after age 50 is it can be financially devastating, especially if you’re close to a planned retirement.
You set aside a comfortable retirement nest egg that calculated golden years spent together as one. Now those same funds will have to support not one, but two households. Experts estimate that expenses after divorce are anywhere from 30-50% more than if you stay together. Those same funds must now support two homes, separate vacations and you lose the financial benefits of a married couple. This duplication can eat into retirement funds at an alarming rate.
Most likely, you will face some difficult choices. You may have to lower your standard of living, or retire later, increase your savings or a combination of all. You may have to consider selling the marital home and splitting the proceeds. That equity can throw off income to live on, so selling may make a lot more sense than one party trying to keep it.
Illness and disability may also force some difficult choices. As a couple, there is comfort in knowing that if one of you becomes ill or disabled, the other partner will be there to help care for you. After a divorce, that burden could fall on your children or hit that nest egg again when you need to hire help. Some extended care planning may be necessary. Be sure to involve your children in these discussions as it will impact them to some degree.
If you were a non-working, or limited-working spouse, you may have to seek new employment. That is never easy, and especially if it requires additional education or experience. This only adds one more transition that must be dealt with at some point in time. You will need to develop a plan on how that will be accomplished and what are the ramifications between now and then.
If you find yourself considering divorce after age 50, the best thing you can to do to minimize the damage is to try and be as amicable as possible with your soon-to-be ex. Get prepared by getting your financial documents organized. Most importantly, to minimize the financial toll, be sure to hire a financial advisor as part of your team. They can work in cooperation with your attorney or mediator. Certified Divorce Financial Analysts (CDFAs) are specially trained in finance in divorce and can help you make sure you are covering all financial implications that may arise. They can assist in providing clarity about decisions, such as keeping the house, if spousal maintenance is necessary, and how to split assets and a Pension.
Some attorneys or CPAs have the credential but if not, it’s well worth the money to add a CDFA to your team.
Ultimately, your best bet for survival, let the professionals handle the finances and legalities, that way you can take care of you.
You may be asking yourself how you will get through this mess. Let me assure you that you will. It will take some time and a lot of effort, but you can do this. The sooner you put your team of professionals together, the easier you will get through this transition.
With the children likely being grown, the main devastation of a gray divorce will be the finances and your emotions. Don’t go at this alone. Get trusted, non-judgmental, family or friends to come along side you. Don’t be afraid to seek out professional counseling. If you still have children at home, they may need some type of support system as well.
If you have read this far, great. You are moving in a positive direction by getting yourself informed. Seek more information. If you would like to chat or ask some questions, visit my website, and set up a complimentary phone call. My best to you in this time of transition.
Oscar N. Alvarez CFP®, CDFA®
Pathway Divorce Solutions