It’s surprisingly difficult to nail down precisely what the divorce rate in our country is. The prevailing belief is that about half of marriages end in divorce; however, statistics can be misleading. Some expertsput the odds quite a bit lower, noting that divorce rates rose sharply in the 1970s and 1980s but have since declined and stabilized somewhat, particularly among people with college educations.
On one point, though, social scientists and statisticians seem to agree: Even while declining overall, the divorce rate is actually on the rise among people over 50 years of age. The phenomenon is so common it has its own name—and the “gray divorce” rate actually doubledbetween 1990 and 2010.
I’ll leave it to sociologists to speculate as to why Baby Boomers are divorcing in greater numbers than other age groups. From my professional standpoint as a divorce financial advisor who works exclusively with women, my concern about this trend is twofold:
- Gray divorce deals a heavier financial blow than divorces that happen earlier in life. Younger adults have more time to regain their financial footing after a divorce. Over 50, the loss can be much harder to recoup. People who divorce later in life are often significantly disadvantaged financially as a result. They are at risk of falling into poverty in their elder years, rather than enjoying a financially secure retirement.
- Women who divorce after 50 are especially vulnerable to financial difficulty, particularly if they have taken time away from paid work to be stay-at-home-Moms.Given higher incomes and more continuous work histories, men are generally much better positioned than women to weather the financial storm of a divorce. There is significant economic disparity between men and women, and the older we get, the more that dangerous gap widens. Researchers reportthat 27% of gray divorced women live in poverty, compared to 11% of divorced men of that age group. Here’s my advice to women who are contemplating divorce later in life:
Take protective measures while you’re married.
- Preserve some measure of financial independence within your marriage. Keep a separate bank account and maintain credit in your own name. For some women, it can be a good idea to keep money aside that your husband can’t access, and maybe doesn’t even know about.
Pay attention to insurance.
- Most women are aware that they will need to provide for their own health insurance after divorce, but many neglect to consider other types of insurance such as life, property/casualty, disability and long-term care. Once you are single, especially over 50, these types of insurance become more important than ever. Be sure to include them in your divorce planning. If you’ll be receiving alimony and/or child support, don’t forget a life insurance policy that protects you financially should something happen to your ex-husband.
Know where you stand with regard to retirement and Social Security.
- Women’s retirements last longer and cost more than men’s; yet, women have typically earned and saved much less toward retirement than men have. This can spell financial disaster in your most vulnerable years. If you haven’t given your future financial security enough attention, you need to correct that straight away.
- A divorced woman who was married at least 10 years and is currently single can claim Social Security benefits based on her ex-husband’s earning record. However, there are limitations on what benefits can be claimed when. Specifically, the ability to receive benefits based only on your ex’s earnings before you also claim your own benefits is being phased out, thus removing a strategy that gave women a bit more time to build retirement savings before drawing their Social Security income.
- Make sure that your divorce financial advisor is considering wise retirement saving options and evaluating any potential wrinkles in your expected Social Security income when helping you work through financial strategies for your later years.
Adjust your lifestyle to help ensure long-term financial security.
- Anyone going through a divorce needs to watch their spending carefully. If your income is changed significantly by your divorce, you’ll want to be able to adapt and rebound. A thoughtful spending plan can help you live within your means, pay off debt and increase your savings.
Ask a room full of women about their hopes for retirement, and you might hear about travel, continued education, hobbies, grandchildren, and lots of rest and relaxation. Nobody plans to be in deep financial difficulty because of a mid- or late-life divorce. While it is possible to survive gray divorce with your finances intact, it takes some serious planning. Expert advice can help. If you’re experiencing or contemplating your own gray divorce, get connected with a divorce financial advisor with specific expertise helping women through it.