Personal Finance

How a Gray Divorce Can Affect Your Retirement

by Alli Thomas

Mar 15, 2021

According to research by the Pew Research Center, the divorce rate for American couples over age 50 has doubled in the last 30 years. The U.S. Census Bureau reports that couples over age 65 are divorcing three times as often now as in 1990. 

Reasons for the sharp increase in gray divorce, according to Equitable Mediation Services, a multi-state divorce mediation firm, include (among others): 

  • The “empty nest syndrome” 
  • Differences in money and spending habits that cannot be resolved 
  • Sexual dissatisfaction 
  • Differences in desired lifestyle (one half of the couple wants to maintain an active life in retirement, while the other half is a confirmed couch potato). 

Pew reports that the marital instability many Baby Boomers experienced earlier in life is partly to blame as remarriages are more likely to end in divorce than first marriages.


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Although divorce can be challenging no matter how old you are, couples who divorce later in life may put their plans of a comfortable retirement at risk. Divorced people, regardless of age, tend to have less wealth than married couples—and a gray divorced person owns only about 20% of the assets of a married couple over 50. 

Women over 50 face special concerns about divorcing later in life, as many have lower Social Security benefits and are more likely to be in poverty than their male counterparts. 

Here is how three common sources of retirement income are treated in case of divorce: 

  • Social Security benefits are not considered community property. However, if your marriage lasted at least 10 years, you may still receive them on your ex-spouse’s record if you are unmarried, age 62 or older and your own Social Security benefit amount is less than your ex-spouse’s. Visit the Social Security Administration’s website to learn more. 
  • Retirement plans are community property. 
  • Life insurance policies should be examined when negotiating a divorce. For permanent life insurance policies, only the policy owner may access the cash value or change beneficiary designations. The lower-earning member of the couple may want to consider taking out a policy on the higher earner – even post-divorce – in order to protect the income stream. 

If you’re concerned about a possible gray divorce, a financial advisor can help you learn more about how it may impact your finances and your retirement plan based on your unique situation. Request a no-cost, no-obligation conversation with one of our advisors today to get started.

Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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