Retirement Implications And Challenges Of Gray Divorce


Recovering from a divorce is never easy, which becomes even more apparent when divorcing later in life. The growing trend in divorces from the baby-boomer generation has given rise to the prevalence of the term “gray divorce,” or divorces by people age 50 and over.

Research from Bowling Green State University found that the number of gray divorces between 1990 and 2009 has doubled, now accounting for around a quarter of all divorces in the United States each year. And there is no indication that number will be slowing down.

Like any divorce, there are a number of obstacles that must be faced before, and after the separation is final. While many of the challenges are similar, the length of time many of these marriages have lasted — sometimes for decades — can severely complicate the process. People divorcing later in life have several important aspects to consider that pose unique complications, particularly regarding retirement, for their post-divorce lives.

Dividing shared assets

Trying to separate the marital estate is almost always one of the biggest points of contention throughout any divorce. However, the longer a couple remains married, the more intertwined their assets become. These include retirement accounts, inheritances that have been applied to marital expenses, such as the home mortgage, investment accounts, loans, etc.

It can be nearly impossible to trace who contributed what and when. Because of this, most judges are apt to divide everything equally. For example, no matter how much you argue that you made a down-payment on a home 30+ years ago and can prove it, simply because you did not complain about it for 30 years is proof enough for a judge that you do not (really) want that money back.

Dividing retirement accounts

In most states, retirement accounts are divided equally between the parties for the value that built between the date of marriage and the date of divorce. Unless the couple depleted the accounts during marriage, this means there is more to give-up in an older-age divorce than a younger-age divorce.

It can be particularly devastating as it comes right when the spouse giving up that share of their savings is often considering retirement. Younger spouses have time to continue contributing to their retirement and effectively “make up” for what they lose as a result of divorce, but the same is not usually true for older-age spouses.


The 50-65 year-old age group has traditionally been a tough club to be a part of when looking for affordable insurance coverage. On top of that, it is a time when health issues can start to become more prevalent, which can sometimes limit your ability to work. If you are currently under a spouse’s coverage, there could be a long void until you are eligible for Medicare at age 65, and even then covering healthcare-related expenses isn’t cheap.

Under the Consolidated Omnibus Budget Reconciliation Act, you may qualify for continued coverage under your former spouse’s group plan for up to three years. However, COBRA benefits are limited in that you or your former spouse now have to pick up the tab for the premiums. You should really figure out a long-term solution to healthcare before getting into the nitty-gritty of divorce.

Spousal support

You might expect a judge to decide that two spouses who are older, retired or retiring, in relatively good health and not required to support children, should accept living a down-sized retired lifestyle, from pensions and not spousal support. Think again.

The judge will attempt to maintain a marital standard of living and will not expect both spouses to accept a retired lifestyle, just because one of the parties wants to retire. This means that one ex-spouse, usually the husband, has to continue to work to support the other, even though he intended to retire.

Financial complications post-divorce

It’s hard to emphasize how important financial planning is during any divorce; however, it is even more crucial during a gray divorce. Money is one of the most contentious issues in a divorce, and the goal of maintaining financial stability can turn a divorce very bitter, very fast. Many divorcees in this age group are coming to the point where they can see the light of retirement, but the financial burden of divorce can often stall those plans. All of a sudden, you are giving up half of your retirement nest egg, half of all acquired assets and often have a spousal support payment as the icing on the cake.

With your household expenses suddenly doubled, it is more important than ever to accurately go over finances and make long-term budget with a certified financial planner. It is almost inevitable that the vision you have held of your golden days has now been completely altered, and you need to be able to accept the fact that things will now be as you had once planned.

Additional concerns

  • Estate planning – Be certain to speak with an estate planner to ensure a living will and testament is in place, and modify the beneficiaries on your life insurance policies.
  • Fear of being alone – Even if you are the one to file for divorce, there will come a time when you question the decision. You have already invested a large portion of your life with that other person, and it can be scary to move forward alone.
  • Adult children – Perhaps you stuck it out for the kids, and now that they have grown,  you think it will be easier for them to accept. That isn’t necessarily the case, so be aware the impact of a divorce on even adult children.
  • Managing your own money – If you weren’t the one in the marriage that was good at managing finances, you had better learn quick. You may soon be on a fixed income, and frivolous spending can dwindle what little of your retirement account is left quicker than you think.
  • Respect your attorney – There’s a good chance your attorney will be much, much younger than you. It is important that you look past the age gap and listen to what they have to say, since you are not the expert in this field.

As can clearly be seen, there are some aspects similar to any divorce, but there is a plethora of issues unique to gray divorce — and this is just the tip of the iceberg. According to a 2004 AARP study, women initiated 66 percent of divorces between the ages of 40 and 69. With everything that is at stake when divorcing close to retirement, it is vital to retain an experienced family law attorney to assist in making sure you do everything possible to protect your retirement. Otherwise, you may end up having to go back to work, and the dream of retirement will be over before it began.

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