No matter how friendly the divorce is, divorce can still be a catastrophic life event for all parties involved. And while most couples who are considering quitting are aware of the toll it can take on them. emotionally, fewer consider the heavy financial toll of a breakup, which increases with age. Studies suggest that the later in life you go your separate ways, the greater the financial impact, and there comes a point when things tend to take a serious turn for the worse. Experts say divorce after this age can ruin your finances and lower your standard of living just as your expenses start to rise. Read on to find out at what age divorce becomes a serious financial risk, and what you can do to protect your wallet.
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Although divorce is difficult at any age, research shows that those who divorce after the age of 50 – what experts call a “gray divorce” – tend to suffer extraordinary financial setbacks. “Getting a gray divorce is a major financial shock” Susan brown, professor of sociology at Bowling Green State University and co-director of the National Center for Family & Marriage Research, said Bloomberg.
Brown, who has chronicled the effects of age on finances after divorce for a recent series of studies, says couples over 50 should expect their wealth to halve after divorce. dissolution of marriage. “It’s a dark picture,” she admits. In addition to having new expenses (housing, vehicles and separate health care, to name a few), assets such as pension funds and property proceeds must now be divided.
That’s not to say that everyone should stay in an unhappy marriage just for the money, but unfortunately for older couples, those who divorce after 50 tend to have a harder time recovering from the financial setback. . “There is no appreciable recovery on the wealth front,” says Brown. “There is no appreciable upturn in living standards.”
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According to research, both parties suffer financially to varying degrees. On average, women over 50 see their standard of living drop by 45%. This is “double the drop seen in previous research on young divorced women,” according to Bloomberg. On the other hand, the standard of living of men is lowered by only 21%, that is to say half of that of their ex-partner. In Brown’s analysis of poverty rates after gray divorce, her team found that 27 percent of women who divorced after age 50 were living in poverty by age 63. In comparison, only 11 percent of men in the same circumstances lived in poverty by the same age. Only three percent of still-married couples of the same age had comparable financial difficulties.
The financial blow to women who divorce after 50 is often the result of their years spent primarily caring for children. After taking time off to raise children or working reduced hours, many find it difficult to re-enter the workforce and are more likely to take lower-paying jobs.
For those who separate after 50, remarriage may be the best way to recoup financial losses, research shows. This makes sense, given that a new partnership may come with shared expenses, joint access to pension funds, health benefits, etc. Bloomberg reports that only three percent of those who remarried after a gray divorce live in poverty, the same number as those who never divorced in the first place. Of course, there are plenty of reasons for choosing to stay single, and getting married just to make up for a hit in your bank account might not be the most appealing notion.
Many people decide not to remarry in the years following a gray divorce. In a report published in the journal Demography, Brown and his team found that only 22% of women and 37% of men married a new partner within 10 years of their separation from the over-50s.
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While a divorce, especially a gray divorce, is only a idea of a good time, it is a sad fact for many. Since 1990, the divorce rate for people over 50 has more than doubled, reports AARP.
If you or your partner To do decide to end your marriage, it is important that you take reasonable steps to protect your finances. For this reason, the AARP has compiled a Financial Checklist for Gray Divorces, which includes everything you will need to do before signing divorce papers.
Additionally, the organization recommends hiring a financial planner or accountant to help you set up your new budget, retirement plan, taxes, etc. Many divorcing couples also benefit – financially and otherwise – from mediation. It can help sort out some of the negotiating points without racking up astronomical lawyer bills – the last thing you need during a tough time that is already so financially strained.
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