Gray Divorce, Red Ink: The Hidden Costs of Divorce After 50

No one is the same person in their 20s as they are in their 50s. Raising children, various careers, and the passing of decades changes people. Sometimes, married couples grow apart. They realize that when they are faced with an “empty nest,” free of children and the various stressors of raising a family, they no longer have anything in common. Other couples delay divorce until their children grow up. Divorce after 50 has financial ramifications, including a loss of health insurance, a need to delay retirement, or downsizing homes.

Read: When getting divorced over 50, experts say avoid these mistakes

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A decline in living standards affected women more than men (57% vs. 25%), according to a recent study by Western & Southern Financial Group. The majority of men (51%) said their living standards were better after divorce, compared to 26% of women. But more men claimed social security earlier than planned (83% vs. 38%).

Delaying retirement after divorce

The costs involved in divorce after 50 led 52% of divorcees to delay retirement by 5 years or more. Another 12% delayed retirement by one or two years. Seven percent said they had no plans to retire, while 9% were retired before the divorce. Only 9% of working divorcees over 50 said divorce didn’t delay their retirement plans. Nearly one-third (31%) said they lost 25% to 49% of their retirement savings in the divorce, while 28% lost even more than that.

Healthcare costs after divorce

The survey found that 69% of divorcees lost access to their ex-spouses health insurance following the divorce. Only 17% had their own coverage, while 15% were able to maintain their spouse’s health insurance following divorce.

Men were hit hardest, had with one-third reporting a monthly increase of $500 after losing their spouse’s health insurance, compared to 15% of women. Overall, 34% of people who divorced over 50 had to pay an extra $250 to $499 for health insurance coverage after losing their ex-spouse’s insurance. One-quarter of survey respondents said they wish they hand known how to better plan for healthcare costs after their divorce.

Downsizing and moving

For many older adults, moving is the biggest lifestyle change following a divorce. One-third went from owning their own home to renting, while 31% downsized to a smaller home. One-quarter reported they had to move in with family or friends.

Tips for a successful divorce after 50

While the survey results may seem bleak if you’re contemplating divorce, careful planning and expert guidance can help you end an unhappy marriage without facing financial ruin.

Following their divorce, more than one-third (34%) of people said they wished they had learned how to budget and manage cash flow alone. Meanwhile, 29% wishes they had learned debt management strategies. An equal amount said they wished they had the knowledge to divide retirement accounts fairly. More than one-quarter (27%) wish they had more help with real estate and housing decisions.

Keeping these things in mind, and discussing them with your future ex-spouse, can help make the process go smoothly.

The survey found that 69% of divorcees lost access to their ex-spouses health insurance following the divorce. Only 17% had their own coverage, while 14% were able to maintain their spouse’s health insurance following divorce.

Seek professional guidance

Turning to experienced professionals can also help. Two-thirds of divorcees said that an estate planning attorney was “very helpful” in the divorce process, while 62% said their financial advisor was very helpful. More than half (54%) said a certified divorce financial analyst was very helpful.

Other helpful professionals included:

• Retirement planning specialist
• Mediator
• Divorce attorney

Overall, getting a clear grasp on your finances can help a gray divorce proceed smoothly.

“Failure to understand your financial circumstances is, without question, the biggest mistake anyone can make,” Sean Smith, family law services attorney at Brach | Eichler, LLC in New Jersey, told Nifty50+.

Don’t neglect the emotional sides of divorce, either. Take care of yourself and seek the help of professionals who can help you make wise decisions to ensure financial security in your next act.

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