Gray divorce can be financially devastating – especially for women

After 25 years of marriage, Vicki Hickok found herself going through a divorce in 2015 at age 55, which left her without the means to afford the expensive western Washington state town where she was born. lived with her husband.

Although she had already retired, she returned to the workforce after her divorce from the U.S. Postal Service to make ends meet. She eventually moved to Mexico for a lower cost of living and a better lifestyle with only three suitcases and her dog.

“I never looked back,” said Hickok, who is now remarried and lives in Bucerias, Mexico.

Hickok isn’t the only one divorcing after 50.

In total, 36% of people who divorce are over the age of 50, according to Susan Brown, professor of sociology and director of the Center for Family and Demographic Research at Bowling Green State University in Ohio.

Another finding in April 2021, from the US Census Bureau, said that 34.9% of all Americans who divorced in the previous calendar year were age 55 or older. This was more than double the rate of any other age group surveyed.

The so-called “gray divorce” can be financially devastating, especially for women. Older women who go through a divorce see their standard of living drop by 45%. That’s much more severe than for men, who see a 21% drop, said Brown, who is also co-director of the National Center for Family & Marriage Research.

“For older people, gray divorce is not something they can recover from quickly. From an economic perspective, there is less time to recoup losses,” Brown said. “If you divorce at 60 or 65, your ability to work much longer is hampered. It’s much harder to bounce back.

After a divorce later in life, 27% of women live below federal poverty guidelines, compared to 14% of men, Brown said.

“The economic blow for women is much harder than for men,” Brown added. “The gender gap in earnings later in life is larger. And women may have lower-paying jobs because they chose more flexible jobs to care for children or parents, or because they weren’t in the workforce and now need to find a job. after the divorce.

Although assets are likely to be split 50-50 in divorce, women historically tend to earn less than men and therefore have less ability to recover.

“Divorce is a financially devastating situation – 50% of assets, 50% of income. It’s just math,” said Cici Van Tine, divorce attorney at Davis Malm & D’Agostine in Boston. happens when your track to recover is less The advice “go get a job” doesn’t work for someone who has never worked before or only worked “mom hours” It’s hard to find a job for these people.

Social security alone is not enough to prevent these women from falling into poverty. Women who have gone through a gray divorce, on average, can count on less than $14,000 a year from Social Security, the Bowling Green researchers found.

Of course, if you were married for 10 years or more, you can apply for Social Security benefits from an ex-spouse. More than half of gray divorces occur among first-marriage couples, Brown said, with more than 55% of gray divorces involving separation for couples who have been married for more than 20 years.

Lily: You can apply for spousal Social Security benefits even if you’re divorced – here’s how

“The Social Security system was designed until death do you part,” Brown said.

The advice to “move on” is only helpful up to a point. Only a quarter of women will remarry or live with a partner after divorce after age 50, the Bowling Green researchers found.

So what should you do if you are facing a gray divorce?

Breathe and Hire Advisors

“Financially speaking, don’t make any critical decisions in the first year,” said Gabrielle Clemens, managing director and wealth advisor at RBC Wealth Management. “Lifestyle change is so difficult to manage. Don’t make big decisions right away.

“Marriage is love. Divorce is about money. Hire a divorce lawyer and hire a financial advisor. Only then can you agree to a settlement,” Clemens said “For women, they may have less savings and face longer lives with large health care expenses. So you have expenses that increase as income decreases, all at a time when you should be protecting your assets. It’s the perfect storm for a financial mess.

“When you get divorced, you have to make the most critical financial decisions of your life at a very emotional time,” said Marc Fitzgerald, family law attorney at Casner & Edwards in Boston.

Fitzgerald recommends not only hiring a lawyer and financial advisor, but also a relationship expert and therapist to help you through the divorce and give you insight into your future life adjustments.

“When you feel better about yourself, you are better able to defend yourself. Be as strong an advocate for yourself as possible. There’s no reason you should be treated differently from the male side in a divorce,” Fitzgerald said.

Make sure you take the time to sort through all assets and future risks.

“The biggest misstep I see is that people are so determined to end a divorce that they don’t bother to fight for what they really should be asking for. Giving up too soon,” Van Tine said, “Years from now you’re going to need the money. So put the brakes on the divorce and take the time to check out all the assets. There’s a fine line between giving up right away and digging in.”

“Don’t be emotional in a divorce. Listen to your financial adviser and attorney so you’re in the best possible place,” Van Tine said.

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Weigh health, housing and child support costs

“One mistake I see is people thinking they can have the same lifestyle as before. Just because you need more doesn’t mean you’ll get that. It can be hard to overcome this state. of mind,” Clemens said.

One concern is that the non-working spouse may not qualify for a mortgage. They may face renting for the rest of their lives or having to move in with their children, which opens up other relationship issues, Clemens said.

Health insurance, long-term care and out-of-pocket health costs are all a big concern for gray divorcees, Clemens said.

“There is also the problem of cognitive decline. There needs to be a financial plan in place because it can be very difficult and expensive,” Clemens said.

In addition, child support ends when the payor turns 67. It can therefore remain a decade or two in life to be financed without alimony. Plus, there’s the risk that the payer won’t live to age 67 or be able to work that long for health reasons, so that’s an additional concern that needs to be considered, Fitzgerald said.

Often, who guards the marital home can be an emotional sticking point. It may not be economically feasible for either party to keep the house due to its costs and maintenance requirements, Fitzgerald said.

“A divorce can end a 25-year partnership. Being too focused on one thing or asset in divorce is not seeing the forest for the trees. You have to look at the whole picture holistically,” Fitzgerald said.

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