No matter how amicable, divorce can still be a catastrophic life event for all parties involved. And while most couples who consider calling it quits are aware of the toll it may take on them emotionally, fewer consider a break up’s serious financial toll, which rises as we age. Studies suggest that the later in life you split up, the greater the financial impact—and there’s a point at which things tend to take a serious turn for the worse. Experts say divorcing after this age can drive your finances into the ground and slash your standard of living just as your expenses begin rise. Read on to find out at which age divorce becomes a serious financial risk, and what you can do to protect your wallet.
Though divorce is hard at any age, research shows that those who divorce after the age of 50—what experts call a “gray divorce”—tend to suffer extraordinary financial setbacks. “Getting a gray divorce is a major financial shock,” Susan Brown, a Bowling Green State University sociology professor and co-director of the National Center for Family & Marriage Research, told Bloomberg.
Brown, who has been chronicling the effects of age on post-divorce finances for a set of recent studies, says that couples over 50 should expect their wealth to drop by half following the dissolution of marriage. “It’s a grim picture,” she admits. Besides having new expenses (separate housing, vehicles, and health care, to name just a few), assets like retirement funds and property proceeds must now be split.
This is not to say that anyone should stay in an unhappy marriage solely for money, but unfortunately for older couples, those who divorce after 50 tend to have a harder time recovering from the financial setback. “There is no appreciable recovery on the wealth front,” says Brown. “There’s no appreciable recovery in standard of living.”
According to the research, the two parties suffer financially to differing degrees. On average, women over 50 find their standard of living decreased by 45 percent. This is “double the decline found in previous research on younger divorced women,” according to Bloomberg. By contrast, men’s standard of living is lowered by just 21 percent—half that of their ex-partner. In Brown’s analysis of poverty rates following gray divorce, her team discovered that 27 percent of women who divorced after 50 were living in poverty by the age of 63. By comparison, just 11 percent of men in the same circumstances were living in poverty by the same age. Only three percent of still-married couples of the same age had a comparable financial struggle.
The financial blow dealt to women who divorce after 50 is often the result of their years spent as primary caregivers for children. After taking time off for child rearing or working a reduced schedule, many find it difficult to re-enter the workforce, and are more likely to accept lower paying jobs.
For those who split up after 50, remarrying may be the best way to recoup financial losses, the research shows. This makes sense, given that with a new partnership may come with shared expenses, joint access to retirement funds, health benefits, and more. Bloomberg reports that only three percent of those who remarried after a gray divorce live in poverty—the same number as those who never divorced in the first place. Of course, there are plenty of reasons to choose to stay single, and marrying just to make up for a hit to your bank account may not be the most attractive notion.
Many people decide not to remarry in the years following a gray divorce. In a report published in the journal Demography, Brown and her team found that just 22 percent of women and 37 percent of men tied the knot with a new partner within 10 years of their over-50 split.
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While a divorce—especially a gray divorce—is no one’s idea of a good time, it’s an unfortunate reality for many. Since 1990, the divorce rate in those over the age of 50 has more than doubled, reports the AARP.
If you or your partner do decide to end your marriage, it’s important that you take reasonable steps to protect your finances. For this reason, the AARP has compiled a financial checklist for gray divorcees, which includes everything you’ll need to do before signing any divorce documents.
Additionally, the organization recommends securing a financial planner or accountant to help you map out your new budget, retirement plan, taxes, and more. Many divorcing couples also benefit—financially and otherwise—from mediation. This can help settle some of the points of negotiation without racking up astronomical lawyer bills—the last thing you need during a difficult time that’s already so financially fraught.