“Divorce is a reality for a number of couples over the age of 50. According to a 2013 study at Bowling Green State University, co-authored by Susan J. Brown and I-Fen Lin, the divorce rate among this age group doubled between 1990 and 2010. Now, one in four Americans getting divorced is 50 or older. The study also indicated that the divorce rate is 2.5 times higher for those in remarriages compared to those in first marriages.” 1
Most married couples look forward to their retirement years when children are grown, have been educated and started lives of their own. Thoughts begin to focus on retirement and what that retirement lifestyle is going to look like. These couples have worked hard, planned and saved for the day they can retire. After decades of marriage, divorce is the last thing couples expect to disrupt their retirement plans. However, more and more baby boomers are finding themselves single and forced to start over financially. Suddenly the couple is faced with divorce, and it is likely their retirement years are not going to look the way they had always planned.
As an increasing number of senior couples call it quits, they find themselves facing a more complex financial situation than their younger counterparts. The agony of kissing a joint retirement fund goodbye means older divorcees face the stark reality of having to rewrite their happily ever afters. Their earning heydays are behind them and opportunities to rebuild their wealth are limited.
In many older (grey) divorces, one partner may have controlled the couple's finances or been the primary income-earner throughout the marriage. The wife may have spent 20 years raising children while the husband spent the same years working full-time. This is a common scenario for today's grey divorcees. This means some women may not have a full grasp of the family finances and some men may have an "I've worked hard all my life" sense of over-entitlement to the couple's assets. Additionally, the stay-at-home spouse (usually the wife) may be looking at insufficient resources to support her current life style and may need to consider re-entering the workforce. If she has been out of the workforce for a significant period of time, it is likely her job skills are “rusty” or non-existent. It is also likely she does not have significant retirement assets, while her spouse has been growing his 401(k), IRA and perhaps pension assets.
What steps can women take throughout their marriage to put themselves in the best possible position should they find themselves facing a divorce or even widowhood? Wives should “take part in the financial picture" during their married years. They should know and understand the financial assets they have accumulated as a couple. Whether a woman initiates a divorce or is served with divorce papers, she needs to be prepared. She should ask herself, “If I find myself facing divorce, would I be financially prepared? Mentally, can I take it? Do I have all my ducks in a row?” Hopefully, she will not have to face dissolution of the marriage, but she needs to be financially prepared should the situation arise.
Cheryl Godwin is NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL ADVICE. All information she provides is financial in nature and should not be construed or relied upon as legal or tax advice. Individuals seeking legal or tax advice should solicit the counsel of competent legal or tax professionals knowledgeable about the divorce laws in their own geographical areas. Divorce financial planning is a fee-only process that does not involve investment advice or securities or insurance transactions.