Coming of Age - Gray Divorce

Baby boomers are changing the face of retirement, opting to stay in the workforce longer or launching new careers in later years.

They’re also changing another aspect of society: divorce.

Divorce among older adults is on the rise, outpacing the rate among younger couples, research shows. Like all divorces, the reasons behind splits involving older people vary. But divorce among retirees and soon-to-be retirees can pose unique financial challenges to older couples, financial experts say.

“People are living longer and they have the desire to pursue a post-career lifestyle that they put off previously for competing priorities,” said Michelle Nocito, a certified divorce financial analyst with Ameriprise Financial. “When they retire, they suddenly find that they and their spouse don’t have a shared reality anymore. What they want and what their spouse wants are two different things.”

The divorce rate among adults over the age of 50 doubled between 1990 and 2010, even as the overall divorce rate declined, according to a study of U.S. Census figures performed by members of Bowling Green State University’s National Center for Family and Marriage Research. About a quarter of divorces in 2010 were among older adults, the study found. That number is expected to increase by a third by 2030.

In Florida, one out of every four divorces involves a person who is 50 or older.

Researchers pointed to several factors for the growth in divorce among older adults, also called “gray divorces.” Baby boomers were the first generation to divorce and remarry in young adulthood, and remarriages are more likely to end in divorce. Rising life expectancy and the growing number of women in the workforce — which gives them more financial freedom to leave a marriage — also are cited as possible factors.

Researchers also say the problems that lead to divorce in older couples are similar to the ones that cause divorce in younger people. For example, financial issues can be a frequent factor in divorces among people of every age. This is especially true in recent years, when many people are struggling to get by, putting stress on the marriage.

Loretta Hutchinson, a certified divorce financial analyst with Harvest Group Financial Services, said finances — particularly retirement accounts — becomes a crucial issue in a divorce between older adults.

“These are two individuals who were living as a couple and saw a retirement as a couple,” Hutchinson said. “When they go through the divorce process, all of a sudden they have to say, ‘This is yours, and this is mine. Now what do we have?’ We have to live as single adults. Single adults do not live as cheaply as couples, quite honestly.”

Retirement accounts, stock options, deferred compensation — all are considered assets in a divorce. For older couples, those retirement accounts may be the largest asset to split, Hutchinson said.

“Retirement and investment accounts play a huge role in the unwinding of the partnership, as it will likely be the most valuable asset,” she said. “Determining how these investments get distributed is vital. Once the decision is made (and) the divorce grant(ed), it is law. These financial decisions are life-defining at this stage in the game because their time horizon is shorter and the ability to bounce back is limited.”

Sometimes, Nocito said, one or both of the parties have to go back to work, or find themselves staying in the workforce longer than expected.

For others, though, a divorce is a way to pursue financial freedom in retirement.

Nocito recalls one couple who simply had different ideas of retirement.

“To them, what it really came down to was, they had a different level of priority in retirement as to what their life looked like in retirement,” she said. “He wanted to get in his RV and travel around the country. In her mind, life was a (different) way.”