Retirement: The rise of ‘gray divorce’
“A lot of us are living longer, but our marriages aren’t,” said Caryl Rivers and Rosalind Barnett in the Los Angeles Times. While the overall U.S. divorce rate is in decline, it has more than doubled for older Americans since 1990. Today, about a quarter of marital splits occur among couples over the age of 50. Increased longevity is a big reason for the rise in so-called gray divorce, because long-married couples “are simply at risk of divorce for more years than couples were in the past.” Divorce is complicated at any age, but maybe even more so for seniors, who must divvy up a lifetime of assets.
Those who quit their marriage late in life often “sacrifice retirement security,” said Carol Hymowitz in Bloomberg Businessweek. Experts say older couples who divorce see their standard of living decline substantially after the split. It’s more expensive to live in separate households, and retirement savings must be divided, leaving both partners with less. Many are also “forced to put off retirement until they regain their financial footing.” And money spats can get acrimonious: Sixty-two percent of divorcing couples 50 or older fight about retirement savings, according to a recent survey of members of the American Academy of Matrimonial Lawyers. Gray divorce may not come with child-custody battles, “but there’s plenty of other things to quarrel over.”
Divorce doesn’t doom financial security, “but it does threaten it,” said Arielle O’Shea in USAToday.com. Men of any age can expect their household income to decline 23 percent after a divorce or separation, according to a 2012 report by the Government Accountability Office. For women, it’s 41 percent. For that reason alone, it’s important for those considering divorce to map out their future budget in detail. Some couples may even consider delaying the split if they are near “certain financial milestones.” For example, you need to be married for 10 years to be eligible for Social Security benefits on your ex-spouse’s record.
“Too often, people give up valuable assets or other rights in order to keep the family home,” said Maryalene LaPonsie in USNews.com. While that may make emotional sense, it doesn’t always work out financially. Given the expense of maintaining a house, downsizing is often the smartest move for the newly single. As for the retirement fund, “couples shouldn’t expect to simply cash out and split the proceeds.” A judicial judgment known as a qualified domestic relations order, or QDRO, is needed, and each plan comes with its own rules for how the money is to be distributed. Don’t be afraid to seek out professional advice. “Divorce can be messy, expensive, and emotionally wrenching, so it’s best not to go it alone.”