Divorces for people over 50—referred to as “Gray Divorce”—are on the rise in the U.S., more than doubling since 1990 as Boomers continue to tie and untie the knot throughout their adult years.
Divorce, of course, means the former couple’s retirement assets will get divvied up as part of the process. After alimony, studies show retirement accounts are the biggest source of contention in divorce proceedings.
Recent findings that the divorce rates for older Americans are rising (while falling for those under 45) sparked a surge of media coverage on the topic, including some alarming assessments of the impact it can have on retirement accounts.
A widely syndicated July 21 article by Bloomberg News quoted research from the National Center for Family & Marriage Research that finds someone getting divorced after age 50 can expect their wealth to drop by about 50%. Not shocking, as splitting up means splitting up assets equitably. But the research also notes that incomes also tend to collapse after a gray divorce, particularly for women.
In fact, when women divorce after age 50, the research found their standard of living fell by about 45%, compared to a 21% decline for men.
By retirement age, these women can be in dire straits, the Bloomberg piece says, citing another 2017 study by National Center for Family & Marriage Research. It found U.S. women 63 and older who went through a gray divorce have a poverty rate of 27%, more than any other group at that age, including widows, and nine times the rate of couples who stay married.
Women often fare worse financially in the wake of divorce due to a number of factors, including decisions to “keep the house” while the ex-husband keeps the retirement account; a potential Social Security penalty in the event they didn’t work enough to qualify for benefits on their own (she receives half the Social Security benefits of her ex if they were married 10 years or more unless she remarries); and the potential loss of health insurance under the ex-husband’s employer.
And while net worth is slashed by divorce, everyday expenses usually don’t fall proportionately.
Behind the rise in gray divorce
According to a 2017 analysis by Pew Research Center, the rate of divorce among Americans age 50 and older has more than doubled since 1990, something attributed to Boomers on their second and third marriages. Among people over 50, people who are remarried are twice as likely to divorce (again).
For those 55-64, the number climbed from five divorces per 1,000 to 15, and from 1.8 per 1,000 to 5 for seniors 65 and older.
Meanwhile, the divorce rates for younger age groups has fallen, as Millennials in particular are delaying getting married or sometimes skipping marriage altogether. Millennials who do get married are more likely to stay together than the Boomers were.
And as Boomers continue to divorce, the rate of gray divorce—if it were to remain steady—would mean about 828,000 Americans over 50 will be divorcing each year by 2030 according to the National Center for Family & Marriage Research.
States with highest, lowest rates of gray divorce
According to the National Center for Family & Marriage Research, South Dakota had the lowest gray divorce rate, with about 5 marriages per 1,000 ending in divorce among women aged 50 and older. Next lowest were Iowa (6.3), Montana (6.4), Nebraska (6.5) and Rhode Island (7.0). The U.S. average was 10.1.
Delaware had the highest gray divorce rate in 2017, with over 13 marriages per 1,000 ending in divorce among women aged 50 and older— more than twice the rate of South Dakota’s. Rounding out the top 5 were Nevada (12.5), Kentucky (12.3), Idaho (12.3) and New Mexico (12.2).
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
