The divorce rate for Americans over 55 has doubled since 1990, while for couples over 65, it has tripled. However, financial outcomes for those going through “gray divorce” are not typically favorable. The increase in gray divorce is evident and substantial, despite a declining divorce rate among younger Americans. Susan Brown, a distinguished sociology professor at Bowling Green State University, notes that one in every ten people getting divorced today is 65 or older, indicating a significant trend. Several demographic factors contribute to this phenomenon, including the aging of the American population, longer healthy lifespans, and delayed marriage. Gray divorce takes a severe toll financially, with costs being particularly high for older individuals.
According to research by Brown and her colleagues, a man’s standard of living can decrease by 21% following a gray divorce, while a woman’s standard of living may plunge by 45%. Both partners experience a significant decline in their wealth, with women often initiating gray divorce and facing poorer financial outcomes due to factors such as lower work experience and reduced potential for future earnings. The financial challenges facing older Americans who divorce are numerous and demand effective strategies for handling them.
One key challenge is to rebuild a shattered retirement plan, as gray divorce can deplete retirement accounts, leaving little time for recovery. Another issue is the prospect of returning to work after a long hiatus, which can be difficult for those who haven’t worked in years. Additionally, determining the fate of the marital home is a crucial decision, as it can represent a significant asset but also bring ongoing financial obligations.
Experts advise careful consideration of all costs and potential implications of certain decisions, such as maintaining the family home, before making any choices. Gray divorce comes with many financial complications, such as impact on Social Security benefits, health insurance, estate plans, and credit card debts. Given these challenges, some individuals may question whether the costs of divorce outweigh the benefits, and if marital counseling might be a better investment than seeking a divorce attorney.
While the increase in gray divorce is notable, it’s important to recognize the substantial financial implications and plan accordingly. Daniel de Visé provides personal finance coverage for USA Today.
