Financial Considerations for Those Going Through A Gray Divorce
Posted on March 18th, 2019 in Divorce
People in Pennsylvania older than 50 who are ending their marriages are considered to be going through a “gray divorce.” The phenomenon was the subject of a recent Bowling Green State University study, which found the rate of divorce in this demographic doubled between 1990 and 2010.
This comes as a bit of a shock, as the divorce rate for nearly every other age group has either dropped or stabilized whereas divorce for those over 50 are rising. Researchers also found that 55 percent of these divorces were among people who were in their first marriages and had been together for more than 20 years.
Terminating a marriage at any point can have financial implications for those involved, but particularly for people older than 50. The BGSU study found that divorcing in older years puts people at a greater risk of becoming impoverished. According to a report in Forbes magazine, gray divorces – which tend to happen right around retirement time – lead to a 40 percent drop in household income for women, compared to just 25 percent for men.
Industry experts advise people in this situation to take several steps to protect themselves financially, including the following:
- Put together a comprehensive picture of financial statements prior to the divorce.
- Work with a financial planner or accountant.
- Review the qualifications for Social Security benefits, especially if a spouse is entitled to an ex’s benefits.
Divorcees should also keep in mind that Medicare benefits begin at age 65, and ending a marriage could mean the approaching end of health benefits. That should be factored into a monthly budget, as insurance costs will likely go up for those who have to acquire a new plan on their own.
Working with professionals can help people going through a gray divorce understand their new financial circumstances. Failing to take appropriate action could leave someone in dire conditions.