Gray Divorce

Gray divorce refers to a trend among Baby Boomers who get divorced later in life. It typically refers to couples who are both over the age of 50.

Divorce among people over age 50 is on the rise, according to data from the National Center for Health Statistics and the U.S. Census Bureau. In the past 25 years, divorce rates have doubled among adults ages 50 and older and tripled for those over age 65.

In addition to being on the rise, gray divorce can present unique challenges as couples tend to be more established, have more health concerns and have more assets to divide — including retirement savings — just as they’re beginning to plan for or engage in life after retirement. Here is what you need to know about navigating a gray divorce.

More people over age 50 find themselves facing divorce today for several reasons. Some reasons include postponing divorce until their children are older, waiting for more financial stability, finding they’re no longer compatible with their partner, or their attitudes toward divorce being more relaxed. Additionally, people who are on their second, third, or fourth marriages are increasingly more likely to get divorced than people who have only been married once.

The emotional charge of a divorce can make it easy to overlook the practical considerations — and drain your nest egg. The cost of advisors, lawyers, therapists, and others can easily cause you to spend through savings you were planning for retirement.

But the reality is, divorcing later in life can be financially devastating due to the costs of inflation and lack of preparation for solo retirement expenses. These concerns can be amplified for women since they live on average five years longer than men and, in turn, require more retirement savings.

Here are four ways to avoid common divorce pitfalls later in life.

It’s easy to get caught up in the emotions of a divorce and want to be done with it as quickly as possible.

However, you and your partner should spend time drawing up a list of all your assets. This includes the obvious, such as savings accounts, retirement savings, checking accounts, debts and investments. But it also includes life insurance policies, health insurance, pensions and personal property.

Who is going to keep what items and who will need to buy new ones? Factor in those costs, as well as lawyer fees, if you opt to go that route. If you need assistance, then local legal aid websites can help.

One common mistake to avoid is hiding assets from your spouse. This may be tempting, but if the assets are discovered, you could get into legal troubles with legal fees and court time, including owing a settlement, contempt of court, and fraud or perjury charges.

Some states make both partners responsible for any debt accrued, regardless of which party accrued it. In nine states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin — you’re responsible for any debt and gains accrued during your marriage, including loans and credit cards, but excluding inheritance and gifts.

This also includes tax implications and college funds. Consider how much you’ll owe in taxes, both annual state and federal taxes. If you have children, know whether your state views college funds as a shared expense or as a conditional expense rather than a requirement.

In addition to adding up your assets, consider the new expenses you’ll both be responsible for. This includes an individual mortgage or rent, electricity, water, sewage, internet and possibly a car payment. You’ll want to create a realistic budget for how much money you’ll need to live each month.

Also consider costs that might not be top of mind, such as health insurance. If you’re covered by your spouse’s health insurance, you’ll be responsible for it after a divorce. You can qualify to use your spouse’s insurance for up to 36 months through COBRA, but it’s substantially more expensive than other options, including employer coverage and the Affordable Care Act. If you choose to do a legal separation rather than a divorce, however, you can keep your partner’s insurance under certain circumstances.

While your house may feel sentimental, your emotions might make your healing process more difficult. And, financially, a home can become an immense burden to maintain — especially with only one person to cover the costs. Costs include more than the mortgage; they may also include any emergency repairs that pop up, property taxes and any general upkeep.

Leaving the family home may be appropriate for some, but for many, it is not the right choice — especially if there are children involved. In any case, the house should be a key part of the negotiated divorce settlement.

At any age, a divorce takes a toll financially, emotionally, and socially. You may experience feelings of depression, anger, fear and hopelessness. However, you can get through it — and you don’t have to do it alone.

Here are a few ways ways to lessen the emotional and social hardships of a divorce.