Once perhaps thought the domain of younger couples, Australia has seen an explosive rise in the phenomenon of “grey divorce” – a term that refers to people over the age of 50. While the rates of divorce for people in their 30’s and 40’s has decreased, the rate of divorce for people aged 50 or over has increased. Between 1985 and 2005, the divorce rate for people aged over 60 had increased by 70%.
Social researcher Mark McCrindle says the trend reflects the increasing age of brides and grooms when they marry. “We’ve seen the average age of marriage get later and people divorcing later.”
Often the trigger for a divorce in later years is the children leaving the home and they find they have nothing in common or are unwilling to live the rest of their lives in an unhappy marriage. Baby boomers are also far less likely to view divorce with the stigma that had been associated with it in previous generations.
Research from the United States shows that people over the age of 50 are twice as likely to divorce as their forebears and that 1 in 4 people going through a divorce today are over 50.
But some of the most serious implications of divorce over the age of 50 are the financial ones.
The opportunities to rebuild wealth after divorce are limited. People over the age of 50 have fewer years left to accumulate wealth back to pre-divorce levels. Older people will also have more trouble obtaining new home loans because of their limited time left in the workplace. Women who may have devoted many years to raising a family may find themselves in a position where they are unable to support themselves.
The superannuation of the spouse who has worked will take a hit. Typically one spouse has worked more than the other, who might have taken a break to raise children. Or one partner has always earned more than the other. Superannuation is split during divorce, and by the age of 50, this is likely to be a substantial asset. It may mean adjusting expectations of retirement income after divorce.
A refusal to give up the family home can lead to an asset-rich but income-poor retirement. The largest asset most couples own is their family home. But upon divorce, it can be too expensive for one person to maintain. There is no point in having a home but being unable to pay daily living expenses.
Forgetting to update estate planning. A couple might have made wills years ago, but forget when they divorce to update their wills. There is also the potential for one spouse to remarry, which means that new arrangements will have to be made.
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