Breaking up in old age can be a costly affair, especially for women. The term “gray divorce” refers to divorce occurring at age 50 and older, and statistics show that the rate of gray divorce has doubled from 1990 to 2019. A study published in The Journals of Gerontology revealed that the share of Americans divorcing at age 50 and older increased from 8% in 1970 to a significant 36% in 2019. This trend is even more pronounced for adults over the age of 65, where the rate of gray divorce tripled. Contrary to the declining rates of divorce among younger adults, the phenomenon of gray divorce is on the rise.
Gray divorce typically has more negative implications for women than for men, according to experts. Studies suggest that women experience a significant drop in household income ranging between 23% and 40% in the year following a divorce. On the other hand, men may even see an increase in their income post-divorce. The disparity in financial outcomes is attributed to factors such as women earning lower incomes than men, having less savings, and a lack of time for near-retirees to recover financially. Many older women who divorce belong to a generation where they did not work throughout their lives, relying on their husbands as the sole breadwinners.
The economic challenges faced by women post-divorce are further exacerbated by their reluctance to remarry or cohabitate in comparison to men. Only 22% of women re-partnered in the decade following a gray divorce, as opposed to 37% of men. This sustained economic disadvantage into old age puts women at a significant financial disadvantage. Research indicates that women’s standard of living declines by 45% following a gray divorce, while men experience a less severe drop of 21%. These negative economic outcomes persist over time, highlighting the chronic economic strain of gray divorce on women.
Financial advisors suggest several steps that women can take to safeguard themselves against the financial pitfalls of gray divorce. Firstly, women should actively engage in their household finances to have a clear understanding of spending, savings, and investments. Being informed about financial matters ensures that women are financially prepared for any eventuality, including divorce. Secondly, having access to their own money and maintaining financial independence is crucial. Women should secure access to their funds to prevent their spouse from controlling their financial resources in case of a divorce.
Strategic financial planning is essential for women, especially concerning Social Security benefits. Women should be strategic in claiming Social Security to maximize their lifetime benefits, particularly in the event of divorce or widowhood. Additionally, saving a portion of any alimony received post-divorce is advisable to ensure financial stability in the long run. It is important to make alimony last beyond the designated period to support ongoing financial needs. Considering a prenuptial or postnuptial agreement with provisions to protect women financially can also be beneficial. Such legal agreements can safeguard a woman’s financial interests, especially if she leaves the workforce to care for children, affecting her earning potential in the long term.
The financial impact of gray divorce on women is significant, with long-lasting repercussions on their economic well-being. By actively engaging in financial matters, strategically planning for the future, and taking proactive steps to protect their financial interests, women can navigate the challenges of gray divorce more effectively and secure their financial stability in later years.