They Call it “Silver Divorce”…

By: Mary Grace Musuneggi, CLU, ChFC, CFS, RFC

They call it “silver” divorce because the picture it invokes is one of a silver-haired granny finding out that her husband is leaving her for a younger woman. Or of a silver-haired man in his 80’s or 90’s whose wife decides she just doesn’t want to spend her remaining years with him.

But the fact is “silver” divorce relates to anyone over the age of 50 who finds they are sitting at the table with attorneys trying to work out a settlement. It may be a settlement for assets, a house, retirement plans, income or even children.

Since 1990, the divorce rate for couples aged 50 or above has doubled (Bowling Green State University Center for Family & Marriage Research). At age 50, a couple could have been married 25 to 30 years. Now assume they are in their 60’s, 70’s, 80’s–or even 90’s–and they could have been married 40, 50, 60 years. Why is this so important to understand? Because during those many years, their financial success, or lack thereof, has been building. At this point, their work history is pretty much a done deal, and their income sources are set in stone.

When faced with the impending divorce, or making the decision to ask for the divorce, emotions often precede logic. Panic can set in. Although the financial issues are complex and should be addressed logically, that is often harder to manage than it sounds.

So what should you do if you find yourself part of a “silver” divorce?

Seek counsel. That means counsel from a therapist, an attorney, and a financial advisor. Let them bring logic to the situation when emotions are running high.

Bypass bitter. Decide that from this point on you will try to be better and not bitter. Bringing anger, resentment, and bitterness to decisions will not benefit you now or later.

Be realistic. Understand that if you did not work outside the home during your marriage, or if you had a job that was just “for the extras,” your financial situation could be bleaker. Your Social Security, for example, could be significantly less. As a result, you may need to work far beyond the normal retirement age of 65 to 67.

Don’t trade away retirement assets to have the “security” of the home. Often the house is seen as a safe haven, and that can be emotionally appealing. But maintaining it after the divorce could be a financial burden.

Make wise decisions. Don’t agree to decisions until you know and feel comfortable with the consequences. Consider that 19 percent of people who divorce after age 50 are poor, and 27 percent of women who divorce after 50 are poor (Bowling Green Study).

$50,000 is not always $50,000. If you are offered an asset, be sure you know what you are actually getting. Getting $50,000 from a 401k, which will be income taxable when you use it, is not the same as $50,000 from a Roth or $50,000 worth of cash that will not be taxable when you receive or use it.

Divorce at any time is a difficult and challenging life event. But after a long marriage and an expectation that the relationship will go on forever, divorce can feel even more daunting. With the right advice, the right financial decisions, the right attitude and the right life choices, your “silver” divorce can become an opportunity to close a window to the past and open a door to a brighter future.