Divorce often raises concerns about asset and income loss for one or both spouses. When spouses get divorced when in their 20s, 30s or even 40s, they theoretically have sufficient time left to work and recoup many of these losses they incur during a divorce.
However, when spouses in their 50s, 60s or even older get divorced, the financial picture may look rather grim. These divorces are called gray divorces.
Factors leading to a gray divorce
Kiplinger explains that more couples in their 50s or older are divorcing now than in prior generations. Multiple reasons may factor into this reality. For one, more people today get divorced and then remarried. Second or subsequent marriages have higher divorce rates than do first marriages. When these remarriages fail, spouses may well be over the age of 50.
Retirement savings and gray divorce
A couple may split some or all of their retirement savings when getting a divorce. A person already retired then must determine how to support themselves on less income than they planned for. Bloomberg notes that this situation may well contribute to significant financial troubles for people, especially women.
A study conducted at Bowling Green State University found that the poverty rate for women over 62 who had previously gone through a gray divorce far exceeds any other group in that age bracket. Nearly 27% of these women fall into the poverty bracket.
The university’s research also discovered that the standard of living for a woman falls 45% after a gray divorce. The drop for a man after a gray divorce is 21%.