Grey divorces can be both emotionally trying and financially traumatic
Late-in-life divorce often poses financial hardships since it takes more money for two individuals to retire comfortably than it does for a couple.
The Arizona Republic recently published a story on the fact that many baby boomers will head into retirement with somewhat “skimpy” financial reserves. The Great Recession, low-paying jobs, and the increasing rarity of private-employer funded pensions have taken a toll on baby boomer finances. At the same time, Yahoo Finance reports that there are now more divorces of couples over age 50 than ever before in history. While a divorce is often an emotionally traumatic event in one’s life, a divorce occurring late in life can often prove to be financially traumatic as well.
Interestingly, an article published this year in Bloomberg News indicates that, with an improving economy, the number of divorces could increase dramatically. Quoting a study by Jessamyn Schaller, an economics professor at the University of Arizona in Tucson, it was observed that divorces had hit a 40-year low during the height of the Great Recession. The study showed that divorce rates are directly tied to the employment rate. Consequently, an increase in the jobless rate during the recession caused many couples to postpone divorce in order to ride out the economic storm together. Better employment prospects, coupled with rising stock and home prices are causing the divorce rate to rebound. Arizona and Florida were noted as two states where divorce rates quickly bounced back from the recession after home prices began to rise.
The author of the Yahoo Finance article on baby boomer divorces notes that two of the biggest challenges for older divorcing couples is dividing up their accumulated assets and then taking sole control of their finances. Obtaining a late in life divorce requires couples to deal with issues such as: (1) who will get the house; (2) determining how retirement plans and pensions will be split; and (3) determining how debts such as mortgage debt or credit card debt will be split. It takes more money for two individuals to retire comfortably than it does for a married couple who retire together.
Effect on women
Forbes magazine has published a thought-provoking article in which it was observed that a late-in-life divorce takes a greater financial toll on women than men. After a divorce, household income decreases for men about 24 percent and for women over 40 percent. According to a sociology professor quoted in the article, for stay-at-home wives, late-in-life divorce can be “economically devastating.” Moreover, it can be a daunting prospect for a women over the age of 50 to reenter the job market after having given up an earlier career in order to be a stay at home mom.
Since women’s life expectancies are higher than men’s, they may well end up living a very long life with rather meager financial resources to rely upon. While divorced women are more likely than married women to work because of absolute economic necessity, their wages often are not sufficient to comfortably support them. AARP quotes a spokesperson for the Institute for Women’s Policy Research as saying that, once women “wind up older and alone” they are often at “a fairly high rate of poverty, on average 20 percent.”
Divorce after the age of 50 is an increasingly common occurrence in the United States. If you find yourself faced with a late-in-life divorce, you should contact an Arizona attorney experienced at handling family law cases. An attorney skilled at handling divorces can provide you with appropriate guidance and advice.
Keywords: grey divorce, trauma, financial, emotional, advice