We seek self-fulfillment and personal satisfaction in marriage. We value open and continued
communication, and that may be hard to come by after decades of combining work and home
responsibilities and the demands of child care. About 1/3 of married people have admitted to
financial infidelity- lying about spending, or hiding money from a spouse. Money issues are a
higher indicator of break-up than issues around sex! (Yes, really.)

If you are 65 now, you can expect to live another 20-25 years. Big life changes like an empty
nest, retirement, or the death of a friend can lead to serious reassessment of a relationship that
is less than ideal.

Getting a Divorce Late in Life Has Additional Financial Consequences

Going it alone late in life may offer freedom, but that comes with many challenges. Retirement
funds earmarked for the you as a couple, won’t go as far to support two separate households.
Dividing the number scramble of plans (401k,403b, 457), as well as pensions, IRA’s,
investments and all your marital assets is a very complex process.

Make certain your health and financial houses are in order for the best outcome in your new life.
A Divorce Financial Planner can help you determine how long your assets will last and what
adjustments are needed for continued financial stability. Divorce also underscores the need for
careful estate planning – especially if you have children.

Any divorce is challenging, but in many ways, grey divorce presents the most difficult hurdles of
all. Be sure to hire a qualified divorce team to help you achieve a settlement that recognizes
your unique position while ensuring your financial stability in both the short and long-term.

Avoid the common mistakes most women make about money, especially when they are in crisis- divorce, widowed, etc.  Schedule a free consultation with me at Calendly.com/contactagrace; or call me at 716-817-6425.

Adrienne Rothstein Grace, CDFA, CFP is a Certified Divorce Financial Analyst , author of
Going From We to Me: A Financial Guide to Divorce, and the founder of Transitioning Finances, a financial strategy firm that works with women who are thinking about, or going through, a financially complicated divorce. She also advises women who have lost a loved one, or experienced other financially challenging transitions. She can be reached at: Adrienne@AdrienneGrace.com.

A large majority (80%) of “grey divorcees,” people who divorced at the age of 50 or older, say they will delay their retirement because they need to work longer than planned and more than half (62%) say their post-divorce savings and investments will no longer be adequate to fund their retirement.

“Going through a divorce can be difficult at any age, but older couples face unique challenges in retirement planning as a result of later-in-life separations,” said Christine Van Cauwenberghe, Assistant Vice-President of Tax and Estate Planning at Investors Group. “With limited earning power and less time to recoup their financial losses, grey divorcees need to re-visit their financial plans.”

More than half (53%) say they have had to adjust their retirement plans and of this group, 55% say that their plans completely changed. Almost half (47%) say they will have to scale back on their anticipated retirement lifestyle.

“Divorce is an emotional process that can cloud your ability to make sound financial decisions that will ultimately affect your future,” said Christine.

The divorce process is overwhelming – especially when more than a third of grey divorces were classified as “bitter divorces.” Of those experiencing bitter divorces, a significant majority (80%) say they found it difficult to make financial decisions surrounding their divorces as compared to 54% of all grey divorces.

Almost three quarters (74%) of respondents who sought the advice of a financial advisor during their divorce agreed they were given sound financial advice throughout the process and 82% agreed their advice was helpful post-divorce.

And those who sought financial advice before their divorce were more confident about their retirement with 39% feeling they would still have enough savings and investments to fund the retirement lifestyle they had planned. Of those who did not work with a financial advisor, only 28% believe they still have enough to fund their retirement.

“After any life change it is crucial to reassess your current financial plan to ensure that it reflects your new direction in life,” said Christine. “As you get closer to your retirement years there is a greater urgency to have a financial plan in place that helps you to achieve the lifestyle you envision whether it be together or apart.”

Here’s a list of questions that I ask each of these clients to consider as we pull together their divorce financial plan. Having a solid understanding of what challenges they will face helps to guide us to create focused post-divorce investment strategies that will help secure a financially sound tomorrow.

1. What about your job? Are you considering transitioning to a new career or finding a position with an existing firm? Do you have a plan for funding this transition? If you are not appropriately licensed/educated, what will it take, in terms of time, training and money to obtain the necessary certifications?
2. Where do you want to live? Urban, suburban, rural? Will any of your children come with you? Or will you be helping to set them up on their own?
3. Do you know what retirement plans you and your spouse have? Are there pensions, in addition to 401k’s and IRA’s ?
4. Do you have a budget in mind, to meet the expenses of your new living arrangements? Do you need help in determining what those expenses are/will be?
5. Is there any debt outstanding: lines of credit, credit cards, car loans, student loans co-signed?
6. Will you need to take on additional debt to fund future housing and expenses, and pay for the expenses of the divorce?
7. Who currently provides health insurance for both spouses? Do you know the cost?  Alternatives for coverage upon divorce?
8. Is there long-term care insurance for either or both spouses? Should such a policy (if currently owned, or available for purchase) be included in the settlement agreement?
9. Have you considered tax consequences of many of the above items: possible capital gains on sale of either/both properties, taxes on withdrawals from retirement plans; capital gains on sale of other investments; tax deduction and liability for spousal maintenance payments? Is there a tax liability from the sale of Harry’s business which may come up in this year’s tax return?

Preparing for a divorce in later years has very specific considerations. Thoroughly educating yourself will help set the way for a brighter future to better enjoy those glorious years of independence.

More than half of all’ grey’ divorces are to couples in first marriages. Indeed, 55% of grey divorces are between couples who’d been married for more than 20 years.

“It’s not as if marital quality has suddenly declined. Instead, I think we have higher expectations now for what constitutes a successful marriage. We expect spouses to be best friends and marriage a source of happiness and fulfillment,” Brown said.

“As women achieve more financial independence and autonomy, frankly, they can afford to get divorced,” she continued. “And after you’ve launched your children and retire, people may realize, ‘Boy, we don’t have much in common, and I could live another 20 years.’ That’s a long time to live with someone you may not be that into anymore.”

Research has found that among divorces of people aged 40-69, 66% of the time it is the woman who initiates the divorce.  For those in good health and with financial resources, a grey divorce may mean an era of freedom and independence, Brown said. But for others, divorce at an older age increases the risk of falling into poverty.

On average, the researchers note, older divorced Americans have only 20% as much wealth as older married couples

That puts the focus on the financial ramifications of later life divorce.

• Diminished resources for retirement with little time to accumulate more
• Change in employment concerns – work longer – try to find a job at a later age
• Potential impact of debt – credit cards, student loans for children, etc.
• Tax consequences of early distribution of retirement funds to meet today’s expenses

Divorce at any age raises very specific challenges – but divorce in later years can be especially devastating on retirement. So- all the more reason to approach divorce at any age with a focus on its effects now, and also ten and twenty years down the road.