Growing old isn’t easy, and here’s more proof.
Except for people over 50, divorce rates in the United States are declining. Twenty years ago, only one out of every ten divorced spouses was 50 or older; today, one out of every four is. According to Jay Lebow, a Northwestern University’s Family Institute psychologist, “If late-life divorce were a disease, it would be an epidemic.” Adding this information to the already daunting double standards, some individuals may not financially recover.
What’s causing this uptick in divorces?
People have more opportunities to grow and grow apart as they live longer. The glue that holds many marriages together dissolves as the kids grow up and move out. More women are working and becoming financially independent. Some are out-earning their spouses; there is no longer a financial imperative to stay together. With changing societal norms, there is less stigma attached to ending a marriage and living alone.
Financial Fall-Out of Divorcing After 50
Divorce can be financially devastating at this age. When you’re single, the cost of living is significantly higher than when you share expenses with someone else. According to the American Academy of Actuaries, per-person costs are about 40% to 50% higher than for couples. Even more concerning is that a mid-to-late-life split can sabotage retirement plans. There’s less time to compensate for losses, pay off debt, and ride out stock market swings. You might also be nearing the end of your prime earning years. With a steady salary, it’s harder to make up for financial shortfalls.
This fall-out for women magnifies these concerns. According to U.S. government statistics, household income drops by about 25% for men and more than 40% for women after a divorce. Furthermore, as women’s life expectancies rise into the 80s, a divorced woman may find herself living much longer with much less.
The Bottom Line
Divorce can be devastating at any age. However, with careful planning, you can save yourself from financial heartbreak in the future. Next week we go over the 10 mistakes to avoid in a Gray Divorce.
Contact Mathius today for your copy of the Divorcing your Mortgage Homeowner Workbook. The guide to credit, real estate, and mortgage financing after divorce. This guide will help you get organized, be prepared, and understand your mortgage financing position. Regardless of whether you need to refinance the marital home in an Equity Buy-Out situation or prepare to sell and purchase a new home post-divorce.