For most Americans, the number of divorces is decreasing. Not for all Americans, though. Those who are over 50 years old have had divorce rates double between 1990 and 2010. Because of this statistic, the risk of getting a divorce is still about 50 percent overall.
Currently, about one in five over the age of 65 is working, which is double that of the early 1980s. One of the main reasons for this could be the financial impact experienced when a grey divorce happens. In many cases, a divorce late in life ends up causing many people to push back their retirement.
Two economists believe that the older a woman is when she divorces, the more likely she’s going to be working full time between the ages of 50 and 74. The two economists recently completed a study that shows that women who divorced before they reached 30 years old were 10 percent less likely to be working between the ages of 50 and 74 than women who divorced while in their 50s.
The financial impact of divorce is much more than just paying attorney fees and court costs. Many women who have children are more likely to want to keep the martial home, even if it means getting rid of their retirement assets. The National Center for Family and Marriage Research said that married Americans over the age of 62 who have never been through a divorce have much lower poverty rates — 3.4 percent. However, for people who divorced before they hit 50 years old, 16 percent are considered poor. For those who divorced after they turned 50, 19 percent were considered poor.
One of the answers could be getting married again. That drops the poverty rate to 3.3 percent. Of course, research has shown that most second and third marriages don’t last. If a divorced woman remarries and then gets divorced again after she is 50 years old, the woman then ends up being simply being older when she turns back to single life.
It’s important for those who are considering a grey divorce to learn more about what can happen financially afterwards. By utilizing the services of an experienced divorce attorney and a financial planner in Fargo, some of the common pitfalls may be avoided.
Source: Bloomberg, “Divorce Is Destroying Retirement,” Ben Steverman, Oct. 17, 2016