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'Gray Divorce' is on The Rise. Here's What Women Need to Know

'Gray Divorce' is on The Rise. Here's What Women Need to Know

September 24, 2023
The number of people filing for divorce after 50 is rising.

While high-profile celebrity break-ups like Britney Spears leaving Sam Asghari or Sofia Vergara splitting from Joe Manganiello grab our attention, what’s making waves in legal circles is “gray divorce.” One in three people who file for divorce in the United States today is older than 50, according to the Journal of Gerontology, and The American Bar Association notes that the 50+ crowd now makes up a quarter of all divorces.

On average, men typically see a 25% decrease in income following a divorce, while women can experience a decrease of over 40%. With this in mind, it’s no surprise that women often experience greater financial hardships following a divorce than men. Additionally, those who go through a so-called “gray divorce,” splitting up after age 50, are nearly 9 times as likely to have financial challenges at age 63 than their continuously married peers.

Let’s examine six financial bombshells women frequently encounter during and after the dissolution of a long-term marriage.

  1. Piles of Debt: Many women are surprised to learn they are jointly responsible for all debt taken on during the marriage, including the mortgage, a home equity line of credit, auto loans, credit card debt incurred by both spouses, 401(k) loans and student loans. They may also be surprised by the amount of debt their spouse has accumulated during the marriage without their knowledge. It’s imperative that women examine joint credit reports and joint tax returns every year to get the full family debt picture. The responsibility for repaying debt should be part of the divorce negotiations since it can seriously impact your future financial situation.


  1. You Can’t Stay in the House: Some women are sentimentally attached to the home and expect that they will continue to live in the marital home after divorce. What they do not realize is they must buy their spouse’s half of the house at current market value and take on all of the home financing on their own. Most couples find they need to sell the marital home to pay off the mortgage, meaning both parties must find a new place to live. A financial professional can help to create a budget and cashflow analysis to help you decide what type of home is more affordable.


  1. Alimony is not Enough: Ready for a big surprise? Many women are not awarded alimony at all. Even if they are awarded, they will likely find it isn’t enough to cover living expenses. That’s why it’s never too soon to start planning for yourself by creating a ‘single-view’ financial plan: Women should work with a financial professional to create a single-view financial plan that reflects only their retirement savings contributions, and only their source of income. While you may have a secure relationship, having a single view plan will help prepare you for the future, regardless of what happens.


  1. A Return to the Workforce: Most stay-at-home moms and wives realize a return to the workforce will be a necessity after a divorce, especially once they realize the realities of alimony. What can be surprising, however, is that many women over age 50 have no tangible skills to return to the workforce after a long-term marriage. Remaining employed or keeping skill sets refreshed during the marriage is highly recommended.


  1. The High Cost of Health Insurance: A grey divorce often means paying for your own health insurance. The price tag can be a surprise if you’re accustomed to being part of your spouse’s employer-sponsored plan. The average cost of health insurance premiums continues to rise, so planning for this expense is a key part of preparing your post-divorce budget.


  1. Social Security & Remarriage: Social security benefits are confusing as a married couple – it can be even more complicated when you get divorced. If you were married for 10 years or more, you can claim spousal benefits on your divorced spouse at age 62. Depending on your ex’s earnings, your current earnings, and your new partner’s earnings, it may not be advantageous to remarry!

Finally, always have a backup plan. Circumstances like a gray divorce can prevent women from retiring as planned. Setting up an emergency savings account with three to six months of expenses, life insurance, disability insurance, a budget, and a plan to reduce your debt can help ensure you have enough left to fund your retirement savings in an emergency.

Going through a gray divorce is rarely a simple or inexpensive process. You can help protect yourself and make the most of your opportunities by collaborating closely with a financial representative and other divorce professionals. It may help decrease complexity, remove uncertainty, and improve fairness for all parties involved.

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