Divorce for couples who are older than 50 is on the rise. Often known as “gray divorce,” it is more than twice as common as it was in 1990. It can cause financial problems for both individuals, but it is more common for those financial problems to fall disproportionately on women.
A sociology professor at Bowling Green State University, where research into the financial impact of divorce on people over 50 was conducted, says that household wealth can decline by 50% after a gray divorce. There are several reasons why it is so hard on people financially. In many cases, there simply is not time to recover financially. People do not have enough years left in the workforce to rebuild their retirement savings and other investments. Older people who need to reenter the workforce after a divorce may struggle to do so.
There are also significant expenses. In addition to each person having to pay for individual housing, many people in this age group have children who are in college. Divorce at this age can have financial and other implications for many family members. On the other hand, older adults who divorce do tend to have more financial resources than younger adults. For men, it is about $165,000 more in assets while for women it is about $50,000 more.
Some older adults may want to look at strategies in property division for keeping them both financially stable after the divorce, particularly if the divorce is relatively amicable. For example, if one person is a high earner, that person might allow a larger portion of the retirement account to go to the lower earner on the assumption that the higher earner can more quickly rebuild the savings. If the mortgage on the house is paid off, it could provide a home after the divorce for the lower-earning spouse.