Gray divorce is divorcing after a long marriage, usually after kids are grown and the couple is in their 50s or 60s. According to an American Bar Association article, the 50+ crowd makes up a quarter of all divorces; 1 in 10 are 65+. Reasons for gray divorce include growing apart, longer life expectancies, COVID and a decrease in the stigma of divorce compared to past generations.
Regardless of why, gray divorce often comes at a financial cost to one or both spouses. Roberta Henault, of counsel with Taylor Huguley Powers in Fairfax, Virginia writes, “I meet with so many individuals who believe they will come out of divorce and enjoy the same standard of living. Except with couples who have a very high-income earner or two well-paid earners, the standard of living is often reduced after divorce.” Roberta’s comments are confirmed by a 2017 study from the Government Accountability Office (GAO): Household income on average drops by 40 percent for women and 25 percent for men after divorce. Many seem to risk financial security in pursuit of a new life.
When pursuing a divorce at any age, it is important to consider finances. Catherine Croft, partner with Farrell & Croft in Manassas, Virginia writes “Acting without understanding consequences is a mistake. Seek counsel before taking any actions and before signing any documents related to separation or divorce.” She adds that “Jumping directly into litigation without exploring settlement options is often a mistake … Collaboration on reaching a settlement agreement before filing for divorce will usually save money for both parties.”
As a financial advisor, I’ve seen people make mistakes. Sometimes, they just want out at any cost. Others want to keep their marital home and sacrifice substantial financial benefits to do so, risking their long-term financial security. Divorce is an emotional ordeal, even when it’s the right thing to do. It is important to identify advisors and attorneys who will work in your best interests, especially when emotions run high.
Securities are offered through LPL Financial (LPL), a registered broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Investment advice offered through Northwest Financial Advisors, a registered investment advisor and separate entity from LPL Financial. Northwest Federal Credit Union (NWFCU) is not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Northwest Financial Advisors and may also be employees of NWFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, NWFCU or Northwest Financial Advisors. Securities and insurance offered through LPL or its affiliates are: