Americans are now living longer than ever, thanks to advances in medicine and health care. However, while increased life spans are largely positive, they can create challenges in other areas, including how to stretch retirement savings over a longer period. But now, attorneys and financial planners are seeing a new, growing trend: grey divorces.
A grey divorce is when a couple over 50 years old decides to end the marriage. In previous years, most people would divorce between the ages of 40 and 50, right as kids were leaving the house for college and other ventures. But now, as kids linger longer in the house and people regularly live until 80 and 90, more and more couples are separating after the age of 50. And with that change come new challenges.
How grey divorces affect retirement
Many people in their 50s and older are mostly concerned with their retirement savings. The typical concern is having enough money saved up to last 10, 20, or even 30 years in the future. However, a divorce at that age can throw everything out of whack.
According to a recent article by InvestmentNews, those who divorce earlier in life have more time to recoup the inevitable losses that will be incurred in the process. However, with recent studies showing as much as a 64% increase in grey divorces, many retirees and soon-to-be-retirees will have a difficult time planning for their future.
Among the chief concerns are:
- Alimony, which factors in every four out of five cases
- Retirement accounts, savings and pensions
- Business ventures
Studies show that one out of every three men in the U.S. and one out of every two women who are currently in their 50s will live to be 90 years old. While a divorce initiated in your 50s may leave you with 40 years of potential happiness, many retire between the ages of 65 and 67, leaving them to rely on retirement accounts for the remaining two decades.
What can individuals do?
No one needs to stay in an unhappy marriage simply for financial convenience. Grey divorces can empower individuals to take charge of their lives. People who are considering splitting up with their spouse should start formulating smart, long lasting plans. An attorney and a financial planner can become invaluable resources in the preparation.