For some couples entering their golden years, the financial landscape may be seeming a little less secure than they may have anticipated. As the rate of divorce for couples after age 50 has doubled since 1990, the phenomenon of gray divorce has garnered recent attention. Studies show that divorcing in middle age is hazardous both financially and from a health standpoint.
Financial loss in gray divorces
As California is a community property state, couples in Manhattan Beach and surrounding areas can expect their assets to be split down the middle, even if one spouse has accumulated more than the other. This encompasses a lifetime of shared assets, including the family home or business, life insurance policies, annuities, retirement accounts, pensions and bank accounts.
In this age group, a divorce can reduce a divorcing spouse’s wealth by 50%. For baby boomers who are going through a second or third divorce, the financial forecast is worse. And because they divorce toward the end of their careers or after retirement, many are unable to bounce back. For women who left work to raise children, re-entering the workforce at this stage can be daunting.
Divorced women in this age group are also less financially stable. Where the standard of living for older men drops by 21% on average after a gray divorce, for women it is 45%. And more than a quarter of women aged 63 and older who divorced late are living in poverty.
The health risks of gray divorce
Studies have shown that there are significant health risks to older people who have experienced a gray divorce. For example, recently divorced older adults tend to have a higher resting blood pressure, and recently divorced older people have higher levels of depression than those whose spouses have passed away.
Recovering from a gray divorce
Finding a new partner appears to be the best way to regain momentum after a gray divorce. While remarrying can quickly resolve depression, it can take longer to recover financially. For women it is even more challenging, as they live longer than men and so have fewer choices as they grow older. Older men also tend to seek out younger women when they remarry.
Divorce is expensive at any stage in life, but for those above 50, it can have serious implications for the future. When preparing for this momentous life change, it is wise to seek sensitive legal counsel that can offer practical guidance on how best to ensure your financial security.
