The Bright Side of Gray Divorce
Gray divorce — a divorce that happens over the age of 50 — is becoming a reality for more and more women while divorces granted in the U.S. for those under 50 are actually declining.
By Jennifer L. Adams
When I talk with women going through a “gray” divorce, I often hear things like “you need to get the word out about this—women need to know our options,” or “I have several friends that are going through this same situation right now.”
So, here we go. Gray divorce—a divorce that happens over the age of 50—is becoming a reality for more and more women. In fact, divorces granted in the U.S. for those under 50 are on the decline, but growing rapidly for those over 50.
Many factors certainly contribute. Clients working on financial planning issues in divorce have told me “When the kids grew up and left for college, we didn’t have anything in common anymore,” and “I wanted to leave earlier, but decided to wait until the kids moved out.”
Gray divorce can be detrimental financially for both spouses, but women generally have a rougher road to travel. They should expect a lifestyle constrained by available income that is about 40% less compared to income funding their marital lifestyle.
If they stayed at home with their children for any length of time, they are subject to lower incomes and fewer opportunities for promotion. Career women may have decided to stay in a position that paid less because they never suspected divorce would happen to them.
Some women who stayed home with their children their entire marriage might be forced to retrain themselves for the workforce completely. There are, however, plenty of financial bright spots that may apply specifically to women going through a gray divorce:
· Women are great at reinventing themselves, planning the future they want to live and not necessarily going along with others’ ideas. I’ve worked with women who are obviously excited about the freedom to reshape their futures.
· One woman I met with was so relieved to get out of her marriage because it meant freedom from financial stress. Her partner’s spending habits had caused tremendous strain on the marriage, and years of counseling had not provided a resolution. Going it alone financially was clearly the better choice for her.
· If you are in a situation where you were not the primary wage earner in the family, you are entitled to one half of your spouse’s Social Security benefit at full retirement age as long as you were married more than ten years.
You can even establish the correct benefit with the Social Security Administration without any involvement from your former spouse. Likewise, most company pensions can be separated for each spouse through a qualified domestic relations order (“QDRO”) distribution; the distribution may even be untaxable at the time of the divorce.
Truly equitable distributions in divorces are possible, but good counsel is very important. Settling a divorce without at least seeking the advice of an attorney is not wise.
· Cohousing, planned communities and “villages” populated by women in similar life circumstances are on the rise. Divorcées are creating their own support system through community building.
Condo developments are morphing into co-ops where singles have the help they need; older adults have access to vetted services like home repairs, errand runners, and transportation to doctors’ visits.
These communities plan outings together—trips, lunches, and evening events. Women in particular find cohousing to be a great option. There is companionship living with another person and financial relief when sharing expenses.
If you find yourself heading towards a gray divorce, traditional advice, like getting good legal representation and preparing for a tighter budget, still applies.
But opening yourself to the freedom to craft creative solutions for the problems you’re facing also makes sense. Understand that you are one among many, and that cooperating with others can at least partially address the financial changes that divorce later in life brings.
Source: “Gray Divorce on the Rise.” Charles Schwab. www.schwab.com.
Jennifer L. Adams is a CERTIFIED FINANCIAL PLANNER™ practitioner, Certified Divorce Financial Analyst (CDFA) and financial advisor at Starks Financial Group (440 Montford Ave. Asheville, NC 28801 // 828-285-8777). Starks Financial Group is not a registered broker/deal, and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment Advisory services offered through Raymond James Financial Services Advisors, Inc. This article expresses the opinions of Jennifer L. Adams and not necessarily those of RJFS or Raymond James. Certified Financial Planner Board of Standards Inc. owns the certification marks CERTIFIED FINANCIAL PLANNER ™ and CFP® in the U.S.