Older couples are splitting at higher rates, and it threatens their financial security.
“Gray divorce” is the term for couples ages 50 and older calling it quits, and it has tripled among couples 65 and older since 1990, reaching 15% in 2022, according to researchers at Bowling Green State University.
By 2019, more than a third of all divorces involved people over 50 — a trend expected to continue as Americans live longer and become more willing to leave unhappy marriages.
But the financial consequences of divorcing later in life can be devastating.
Tracy Byrnes, vice president of Women and Investing at Lebenthal Global Advisors, tells InvestmentNews that the realization that a nest egg that was designed to fund one household in retirement now has to support two often comes as a big shock:
“Fixed costs like housing, insurance, and utilities double overnight, but Social Security benefits and retirement savings don’t. And at this stage of life, many couples may already be drawing down assets instead of accumulating them.”
Divorcing late in life means less time to rebuild and recover funds. So, what are the signs, and what action can you take?
Warning signs your marriage may be headed for divorce
According to The Micklin Law Group, certain patterns often emerge before a gray divorce becomes inevitable. Watch for these red flags:
- Strained communication: Couples struggle to express their needs effectively, and meaningful conversations decline.
- Growing apart: One or both spouses shift priorities toward individual pursuits rather than shared goals.
- Lifestyle shifts: One spouse may be drawn to new hobbies, new social circles or career shifts that exclude the other.
- Financial disputes: Disagreements about spending and saving can cause irreparable rifts.
- Keeping secrets: Secretive behavior around finances, communications or online activity often signals eroding trust.
- Lack of emotional intimacy: When spouses become distant or disengaged, it often reflects deeper dissatisfaction.
- Lack of physical intimacy: Romantic connections may decline or disappear entirely, often reflecting emotional distance.
- Empty nest syndrome: Once children grow up and move out, underlying marital problems can become exposed.
- Counseling: One partner’s request or demand for therapy or counseling may indicate either a last-ditch effort to save the marriage or preparation for separation.
- Legal consultations: Seeking divorce attorney advice is the clearest sign someone is seriously considering ending the marriage.
Protecting your financial future
Certified Financial Planner Evan T. Beach stresses how important it is to have finances somewhat in order before you start divorce paperwork and proceeding, writing in Kiplinger:
“Divorce is complicated, and very few parties walk away feeling they got a ‘fair deal.’ But at the core of the drop in living standards is very simple math: Assets are cut in half, but expenses are not.”
Planning for divorce can be uncomfortable, but ignoring the possibility could leave you vulnerable.
For those coming up on retirement, this means scrutinizing retirement accounts, Social Security benefits and other financial management strategies. Delaying retirement might be necessary to give you time to build up more savings.
There are taxes to consider too. Divorcees will move from married filing jointly to single filer status, which could mean changes to your tax burden.
The complexity of dividing retirement accounts, recalculating Social Security benefits and managing tax implications makes professional guidance essential.
Working with a vetted financial advisor one on one can help you get the support and answers you need to your biggest concerns leading up to and after a divorce. If you have at least $100,000 in investable assets, take a one-minute quiz now to get matched with an expert advisor who can best meet your needs through this big life event.
As separations rise for older Americans, it’s important to think about how a split could affect your finances.
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