Study sheds further light on the financial toll of gray divorce

New research suggests people who divorce later in life, particularly women, are likelier to have to delay retirement and face other financial challenges.

Divorce can be financially burdensome at any age, since it creates unavoidable legal expenses and exposes spouses to the increased costs of living alone. However, it may be especially financially challenging when it occurs after the age of 50. New research suggests that many people who are navigating these so-called "gray divorces" in Shelton are at risk for poverty and delayed retirement, with women facing the greatest likelihood of these outcomes.

Severe financial impacts

Prior research has shown that gray divorce can greatly increase the likelihood of a person living in poverty. According to The Pittsburgh Post-Gazette, 19 percent of people who are over the age of 62 and got divorced after age 50 live in poverty. In contrast, just 3.4 percent of their married peers are impoverished. The financial burden of gray divorce also appears to fall more heavily on women. While 11.4 percent of men live in poverty after gray divorce, 27 percent of women do.

Not surprisingly, gray divorce can be a huge obstacle to retirement. These divorces occur when spouses have limited working years left, which can make recovering financially more difficult. These separations also markedly increase each spouse's retirement costs. According to USA Today, the total costs of two retirements may be up to 50 percent higher than the cost of one joint retirement. To compensate for this, many spouses must return to the workforce or prolong their working years.

The recent study, which focused exclusively on data for women, found that those who divorce later in life are more likely to have to continue working full-time long after retirement age. According to The Pittsburgh Post-Gazette, divorcing any time after age 30 makes a woman 10 percent likelier to continue working full-time between ages 50 and 74. The likelihood of full-time work being necessary past retirement age may be even higher for people who divorce after age 50.

Mitigating financial losses

Considering these findings, it is important for spouses who are divorcing near retirement age to take a few steps to protect themselves from financial distress. These include the following measures:

  • Consider ways to reduce the expenses associated with divorce, such as reaching a settlement through mediation rather than litigation.
  • Carefully reassess short-term expenses and retirement costs, and evaluate any proposed settlements with those costs in mind.
  • Avoid giving up retirement benefits to pursue property that is less practical, such as the family house.

To protect their financial interests, spouses should also take time to understand their rights to marital property and financial support. For example, here in Connecticut, all property that each spouse owns - regardless of how or when it was acquired - is subject to "equitable distribution" between both spouses. Additionally, a financially disadvantaged spouse may be entitled to spousal support or alimony, which may help him or her become more self-sufficient or maintain a marital standard of living.

For assistance seeking a settlement that meets both short- and long-term financial needs, divorcing spouses may benefit from partnering with an attorney. A lawyer may be able to advise a person on avoiding common financial mistakes at each stage of the divorce process.