GRAND RAPIDS, Mich (WOTV) – Divorce over the age of 50, known as ‘grey divorce’ has increased over 50% since 1990. Often, these couples face financial challenges that are above and beyond their younger counterparts simply because of their age and women get hit harder. 11% of divorced men and 18% of divorced women have incomes that put them in the poverty category, but older women have a more difficult time recovering from a divorce.
The mere fact that they have less time to recover financially before retirement has a huge impact. Trying to catch up to make up the assets they have lost to their spouse’s during the divorce is nearly impossible in a shorter amount of time. Women still earn less money than men and therefore are often unable to squirrel away as much as a man that is the same age can.
If the woman does not have a job, or is working part time she will find that it is difficult for anyone in their 50’s and beyond to find employment. Usually, it pays far less then what she may have been paid in younger years before she quit working. The reduction in pay makes it even more difficult to put money aside for retirement. That is, if she has current skills that are marketable. If not, then school loans enter into the picture as she gets an education to be able to support herself. Trying to pay back school loans while saving for retirement is a real challenge.
Sometimes, during the divorce, women make decisions without being aware of the financial impact that decision will have on their future. For example, if the woman decides she wants to keep the marital home her husband will get something of equal value, usually cash or a retirement account or pension. Once the divorce is final she finds that she cannot afford the upkeep, taxes and expense of owning the home or has no cash to pay her legal bills, groceries, etc., and has to sell. Whether it is a good idea to keep the marital home rather than cash or 401K’s is something that needs to be assessed by taking a good look at your overall financial situation.
A thorough evaluation of your finances, expectations for your future, marketable skills and retirement savings are a must do if you are divorcing in later life. A professional financial adviser should be able to assess what you have and advise you as to whether you should be asking for cash, retirement accounts, or real estate in your divorce negotiations. Along with your attorney, you can plan a strategy to help keep you from falling into poverty and having little to fall back on during retirement.