DIVORCE FINANCES

How to Approach “Grey Divorce”

Andrew Hatherley, CDFA®
January 9, 2018

Divorce after the age of 50 is more and more common. And so is the fact that divorce after age 50 can be financially devastating, especially if you’re close to planned retirement. Divorces like this are also referred to as “Grey Divorce.” 

As a couple you’ve saved a retirement nest egg and have assumed that your golden years would be spent together. Now those same funds will have to support two households. Experts estimate that post-divorce expenses are anywhere from 30-50% more than if you stay together. Your marital retirement savings must now fund two of everything: Two homes, two cars, separate vacations, separate trips to see the grandchildren, etc. This duplication can quickly eat into a retirement fund.

Your marital retirement savings must now fund two of everything: Two homes, two cars, separate vacations, separate trips to see the grandchildren, etc.
Your marital retirement savings must now fund two of everything: Two homes, two cars, separate vacations, separate trips to see the grandchildren, etc.
You will face some difficult choices. You can either reduce your standard of living or retire later and increase your savings. You may both have to consider selling the marital home to split the proceeds so both parties can downsize. That equity can generate income to live on, so selling may make a lot more sense than one party trying to keep the home.
“If divorce after age 50 happens to you, minimize the damage by being as cooperative with your spouse as possible.”
Illness and disability may also force some difficult choices. As a couple, there is some comfort in knowing that if one of you becomes ill or disabled, the other partner will be there to help. After a divorce, that burden could fall to your children or hit your savings again when you need to hire help.

If divorce after age 50 happens to you, minimize the damage by being as cooperative with your spouse as possible. Prepare yourself, get your documents in order. Most importantly, to minimize the financial toll, be sure to hire a financial advisor along with an attorney or mediator. And consider the collaborative or mediation process.

“With the children more than likely being adults, the main devastation of a gray divorce will be the finances and your emotions.”

With the children more than likely being adults, the main devastation of a grey divorce will be the finances and your emotions. Certified Divorce Financial Analysts® (CDFA®) are trained in the area of divorce financial settlements and can help you make sure you are covering all of the key issues. They can help you clarify whether you should keep the house, if spousal maintenance is necessary, and how to split the pension. It’s worth the investment to add a CDFA® to your team.

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Certified Divorce Financial Analyst (CDFA®), Andrew Hatherley can help you to reach a workable resolution to your divorce so that you can get on with your new life and get started on your dreams.

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Andrew Hatherley is NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL ADVICE. All information he provides is financial in nature and should not be construed or relied upon as legal or tax advice. Individuals seeking legal or tax advice should solicit the counsel of competent legal or tax professionals knowledgeable about the divorce laws in their own geographical areas. Divorce planning is a fee-only process that does not involve investment advice or securities or insurance transactions.

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