Coupling Struggling with Gray Divorce

Gray Divorce is on the Rise, but Retirement Planning Can Reduce the Impact (or Help You Avoid It)

June 26, 2019
Dan DeMarestBy Dan DeMarest
Vice President of Wealth Management 

While divorce rates are trending downward for most of the population, there is one age group where divorces are actually increasing — those over the age of 50. 

Many older couples aren’t aware of the legal consequences and everyday implications of divorce later in life. Some of the most troubling issues involve health care, insurance, retirement savings, Social Security and taxes. In this article, we’ll discuss what gray divorce is, and how preparing financially now can help you mitigate the impact of gray divorce later — and hopefully avoid it altogether.

What is gray divorce?

The term “gray divorce” refers to divorce among couples who have been married for an extended period of time - usually more than 40 years. When the term first surfaced, it was assumed that anyone married for that long was probably older with grayer hair, hence the term “gray” divorce. Today, however, the phrase is generally used to refer to the divorce phenomena among baby boomers, regardless of the length of their marriage or the color of their hair.

In fact, while divorce among young adults is becoming less common, according to Pew Research, divorce among older generations is on the rise. Since 1990, the divorce rate among those aged 50 years and older has nearly doubled — and more than doubled for men and women aged 65 and older.

Graph of Divorce Population in Iowa

Why is gray divorce on the rise?

While there are many reasons people decide to end their marriage, researchers from Bowling Green State University (BGSU) identified four main factors for the rising trend in gray divorce.

1. The divorce echo effect.

It might go without saying, but older couples are often in their second or third marriage, and these “remarriages” are more likely to end than first marriages. Why? Because once a spouse has already gone through a divorce, they are more willing to end their second or third marriage if they feel dissatisfied.

The study also found an increase in the breakup rate of older couples in their first marriage. Over half of gray divorces are couples in their first marriage, and most of them  — 55 percent — are marriages of 20 years or more. According to BGSU’s research, there is no evidence of today’s marriages being more meaningless than in the past, but older generations show an unwillingness to put up with them.

2. Higher standards for marriage.

Gone are the days of simply being a reliable provider and an exceptional housewife. In contemporary America, the research says, marriage requires a sense of fulfillment that wasn’t expected in the past. Spouses are supposed to be best friends, people you can have fun with and make memories that will last a lifetime. If a man or woman loses interest in their significant other and begins to feel unhappy, divorce is viewed as a viable and socially acceptable option to call it quits.

3. People are living longer.

With the advent of modern-day health care and health facilities, people are living much longer than their ancestors. Men and women over the age of 50 and 60 can expect to live another 20 to 30 years — which, many research subjects say, is a long time to stay in an unpleasant marriage. Due to the larger number of divorced people in the population, opportunities for older adults in their 50’s, 60’s and 70’s to meet new partners are more prevalent and widespread than in previous generations. In fact (and maybe surprisingly), online dating is growing among older adults.

4. Women at work.

Over the last several decades, there has been a rise in the number of females in the workforce. This development offers women, in particular, a unique opportunity to support themselves outside of marriage. Generally, women of past eras were financially dependent on their husband and did not have this option. What’s more? Research since the 1940’s has shown that women initiate divorce more than men. Why? It’s hard to pinpoint, there is no specific evidence to show women today are more unhappy than women of the past, but, one truth is self evident: modern women are certainly more financially independent.

How financial planning can help prevent gray divorce:

Perhaps one of the biggest drivers of divorce is lack of communication about finances after retirement. It’s essential that couples spend time discussing each other’s expectations for retirement — such as when each partner would like to retire, where they would like to live, how they expect to support themselves and goals for later on in life. It’s these conversations that can help couples navigate the road ahead and maintain a healthy and vigorous relationship. (If you need a starting point, set up an appointment with a financial advisor who can help initiate the conversation).

Approaching those tough conversations about money can be stressful, but financial discussions are well worth it for the health of your marriage. Discussing the topic of longevity and identifying your expectations for retirement — both materially and financially — can help couples avoid gray divorce all together. According to a recent study conducted by the Institute for Divorce Financial Analysts, 22 percent of divorces are caused by money issues or money arguments. So before you become a statistic, try talking through some of these retirement points.

Question 1: When do we want to retire?

This might seem like an easy question, but time is money. When it comes to retirement, the age you’d like to retire is a direct factor of how much money you need to be saving. It is necessary that you and your partner are on the same page about what is attainable for retirement age so neither party ends up disillusioned, leading to gray divorce.

Question 2: What do we want to do in retirement?

Couples that want to stay at home are going to require different financial means than couples who would like to travel the world after retirement. You and your spouse should discuss what you want to do with your retirement and think about how you will finance your adventures in retirement.

Question 3: What will our budget be in retirement?

Before retirement you and your partner should analyze your finances and determine your maximum monthly budget based on your financial savings. Compare this monthly budget with your retirement goals to be sure you have enough money set aside for each spouse to live a full retirement.

Question 4: How do you feel about financial risk?

Talk with your spouse about their comfort level with financial risk. A healthy savings includes a diversified portfolio of savings and investments, but as you get older, that balance of risk may shift. Understand what your other partner expects in terms of the stability of your savings and adjust your plan accordingly to fit both of your needs.

Don’t let gray divorce cast a shadow over your retirement

Whether or not you and your spouse have already thought about retirement, preparing for the milestone will be advantageous when the time comes. It’s important to examine your spending, your debts, your investments and your risk tolerance so you know exactly where you stand financially. Preplanning can help you prepare for the retirement of your dreams and ensure you spend it together.

If you’re ready to plan for that next step in life, set up a time to meet with one of our wealth management experts. Our team will work with you and your spouse to develop a post-retirement plan that aligns with your goals.

About the Author

Dan DeMarest, CFP®, CRPC

Dan DeMarest is the Vice President of Business Development within Security National Bank's Wealth Management Division. A lifelong Siouxland resident, Dan has more than 30 years of financial and wealth management experience. He is a graduate of Morningside College and the Iowa School of Banking.