As if shingles and knee replacements weren't enough to worry about when you hit your 50s, divorce is yet another thing to fret over, and with good reason. For those 55 to 64 years old, the divorce rate has more than doubled, from five divorces per 1,000 marriages in 1990 to 12 per 1,000 in 2017, according to the National Center for Family and Marriage Research at Bowling Green University.
It's a worrisome trend. For all the emotional pain divorce causes, financial pain is a big part of calling it quits, too, particularly if you have decades’ worth of accumulated assets and commingled accounts. If you're considering a late-life divorce, or if you're already in the middle of one, make sure you weigh all the financial ramifications.
Gray divorce: A big hit to your bottom line
There's no way to sugarcoat those ramifications. For starters, your wealth will drop by half, assuming you split everything equally. At the same time, your expenses will increase: separate residences and two sets of bills for everything from utilities to insurance. Researchers found the standard of living for women who divorce after 50 drops an average 45 percent; for men, it's 21 percent.
The problems continue into retirement. You'll have to split your retirement funds, which can mean a considerable reduction in the amount of income you get when you start tapping your nest egg. Even worse, 48 percent of households headed by someone 55 and older lack any form of retirement savings, according to the latest estimates by the U.S. Government Accountability Office (GAO).
The older you are, the greater the impact divorce can have. “A 50-year-old divorcee is very different than a 65-year-old divorcee,” says Robin Graine, a certified divorce financial analyst in Reston, Virginia. “I've had a few women clients quite recently who jump-started their careers at 50. They wouldn't have done that at 65.”