“WHEN WE ARE NO LONGER ABLE TO CHANGE A SITUATION, WE ARE CHALLENGED TO CHANGE OURSELVES.”
– VIKTOR FRANKL
Most people don’t stand at the altar thinking their marriage will end in divorce. When you imagined your life it may have gone a little like college, job, wife, kids, retirement on the beach, or some variation. You probably didn’t add in a mid-life or “gray” (as it’s termed if you are over 50) divorce. But here you are. Life can be unpredictable that way. Considering 52.7% of marriages end in divorce, you’re not alone.[i]
Mid-Life Divorce
Baby Boomers are divorcing at a much higher rate than the generation before or after them. Currently, 1 in 4 divorces are couples over 50, and the gray divorce rate has doubled since 1990.[ii] There are some theories as to why this is the case. For some, it’s the transitional periods like empty-nest, mid-life crisis, or retirement that trigger the desire to uncouple. The Boomers are also a unique generation in that they plan to live longer and are healthier than previous retirees. Divorce for Boomers also comes with less of a stigma than for previous generations. Unfortunately, there are some downsides to divorcing later and a big one is your financial security. Boomers are already coming up short on their retirement savings. They generally have not saved enough to offset the loss of pensions and The Great Recession. In fact, 48% of Boomers are not on track to afford the basic expenses of retirement.[iii]
Challenges of Gray Divorce
While all divorces are challenging both emotionally and financially, gray divorces come with their own unique obstacles that can greatly impact how and when you retire. You’ve been saving and working with the goals to support two people who are together, sharing homes and finances, but now, you need to change the plan. That money has to be halved and the savings must support two households. If you were the breadwinner you may need to pay alimony. If you have little ones, you may also need to pay child support, or college tuition for older children. For many, this will mean having to do more with less. This also means less money going into your retirement savings. Divorce can be particularly damaging to women financially, as they tend to live longer and often earn less in their lifetimes.[iv] Loneliness and a lack of social connection, on the other hand, can be harder on men after divorce. Recent studies find loneliness being as bad for your health as smoking or obesity.[v] 71% of men report turning to a partner for support if depressed, compared with only 39% of women.[vi] For both, looking ahead at what their single life retirement will be like, is important.
Preparation is Key
Divorce is a major undertaking, so needless to say it should not be entered into impulsively. Communication is vital. You need to be able to able to have healthy, practical, sometimes difficult conversations with your soon-to-be ex. The more you can talk about what you have, what you will need, and what the future will look like, the better off the two of you will be. Especially if there are children in the picture, you need to find civil and productive ways to talk about money, schedules etc. Below are some important steps to take before you divorce.
- Be Prepared. Get your records in order: every bank account, credit card, student loan, savings account, investment, tax return. Have copies of anything and everything that you share: marriage certificate, cars, homes, cell phone accounts, insurance, beneficiary paperwork, living wills, etc. Gathering up all this shared documentation can be difficult, but all the more reason to work toward open and civil communication with a partner.
- Be Practical. Divorce is an emotional time, the end of a relationship. That said, it is also the beginning of a new chapter for both of you. You want to be able to take care of yourself into old age and retirement. You want to live comfortably. Create realistic budgets of how much you will need, incorporating all of your new expenses. Approach negotiations not wanting to hurt or punish the other person, but reaching a fair and equitable balance for both parties. As divorced couples are less financially secure in old age[vii], from the simple things like less social security per household, it’s important to be frank and realistic. It may help to talk to financial advisors to form long-term plans.
- Be Present. Dismantling a shared life is hard. The divorce process is an emotional one, filled with grief, loss, and loneliness. In fact, divorced men are seven times more likely to become depressed and are more prone to suicide and alcohol abuse.[viii] Having a strong support network and plans for the future is key. It’s easy to get pulled into the past, but maintaining a forward, positive outlook can really help through the hardest parts. Your marriage may be ending, but your life isn’t. Nurture friendships, rediscover hobbies, build relationships, and seek out a therapist if needed. Try to be honest and open. Now is the time to reassess and change the plan, find a new path and pursue new experiences.
End of One Thing, Start of Another
You are ending an important chapter in your life. What lies ahead is up to you. Approaching the separation prepared, both emotionally and financially, will only help ease you through the transition. Looking realistically at how much you have, need, and will divide, as well as seeking out financial and emotional support will keep you on track. To new adventures and new chapters!
Taking a thing apart is always faster than putting something together. This is true of everything except marriage.
― Joe Hill
[i] http://fortune.com/2016/06/17/baby-boomers-divorce/
[ii] https://www.psychologytoday.com/us/blog/complicated-love/201809/7-surprising-facts-about-gray-divorce
[iii] https://www.aarp.org/work/retirement-planning/info-2014/boomer-retirement-little-savings-means-working.html
[iv] https://www.marketwatch.com/story/your-failing-marriage-is-about-to-make-the-retirement-crisis-worse-2017-03-13
[v] https://www.newsweek.com/friendships-are-beneficial-older-adults-study-633778
[vi] https://psychotherapy.psychiatryonline.org/doi/pdf/10.1176/appi.psychotherapy.2004.58.2.174
[vii] https://journals.sagepub.com/doi/abs/10.1177/0164027516656139?journalCode=roaa
[viii] https://slate.com/human-interest/2018/06/are-we-socializing-men-to-die-by-suicide.html
Disclosure text: Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.
