The escalating divorce rate for people who are 50 and older is taking a toll on today’s and tomorrow’s retirees. Along with the complexity of dividing pensions, deferred-compensation plans and stock options, divorcing spouses can feel stress and depression at the end of a long marriage, not to mention anger, resentment and even panic amid fiercely adversarial litigation. Court costs exceeding $100,000 can further deplete assets halved by decree.
In 2009, the divorce rate for people in the 50-and-older age group was twice as high as it was in 1990 (10 divorced persons per 1,000 married versus five divorced persons per 1,000 married). By contrast, the overall U.S. divorce rate stayed essentially flat during this 20-year span.
These findings by Professor Susan Brown and Associate Professor I-Fen Lin of Bowling Green State University’s department of sociology are significant for financial advisors. The increasingly larger older segment of the population holds most of the nation’s wealth, yet divorce can leave both ex-spouses at risk of a financially pinched retirement. What’s more, Brown and Lin say, “the divorced are expected to constitute a larger share of older persons.”
As an alternative to litigation, a collaborative divorce lets both spouses view and discuss a variety of financial scenarios based on a neutral professional’s assessment of their complete situation. In consultation with their own attorneys and aided by a divorce coach who helps them manage the emotional aspects of the breakup, older spouses have an opportunity to develop a mutually acceptable settlement that leaves them still friends.
In 2012, Olivia Mellan wrote a series on “gray divorcés” for Investment Advisor. Visit the the Graying of Divorce homepage to learn more about advising these couples here.