money trouble

"Minimize your investment risk. You just lost half your financial assets due to divorce and can’t afford to lose 25-50 percent in the next stock market crash.'

A “gray divorce” applies to breakups involving people over 50.

Data from the National Center for Health Statistics and the U.S. Census Bureau show the divorce rate for those 50 and up has doubled since the 1990s and tripled for those 65 and older since 1990. 

Divorce, no matter what the age, is often an emotional and financial crisis.

 A major longitudinal survey was conducted on 20,000 Americans born before 1960 by I-Fen Lin, Anna Hammersmith and Susan Brown.

 Susan is the co-director of the Bowling Green University National Center for Family & Marriage Research. 

Women who divorce after age 50 see their standard of living plunge by 45 percent – double the decline for younger divorced women. 

Older men see a 21 percent drop in their standard of living after a gray divorce. In virtually all states, one loses half of all assets after a long-term divorce, absent a very strong pre-nuptial agreement.

When Brown and her colleagues surveyed those for up to a decade post-divorce, “There is no appreciable recovery on the wealth front and in standard of living.

According to the Bowling Green study, of those Americans older than 63 who qualify as poor, 26.9 percent are gray divorced women who remain unpartnered and 11.9 percent are unpartnered gray divorced men. Only 3.4 percent of Americans older than 63 who are considered poor have been continuously married.

The other percentages are 3.1 percent, remarried after early divorce; 3.3 percent, remarried after gray divorce; 18.6 percent, unpartnered early divorced women; 10.7 percent, unpartnered early divorced men.

At least 40-50 percent of first marriages wind up in divorce and a higher percentage of second and third marriages wind up in divorce. 

There are complex emotional, lifestyle, and financial factors causing divorces. 

The financial consequences are so serious one should go through lengthy counseling before divorce. 

One should also preserve assets by going through mediation instead of hiring two sets of attorneys who motivate you to fight for years with huge legal fees.  

However, do hire a CPA or some impartial financial analyst to make sure all the assets are counted and the net after-tax assets are divided equally. 

Getting half of his $1 million 401k, which is taxed as ordinary income rates when funds are withdrawn is not the same as receiving the $500,000 free-and-clear house.

Now you are getting a gray divorce, how do you still have a future comfortable retirement when you are now 50, 55, or even 65 years old?

Plan on working at least 5-10 years later than originally planned so you can add to your retirement nest egg.

Don’t take your Social Security retirement benefits until age 70, where it may be up to double what it would be at age 62. Note only 3 percent wait until age 70.

Be very realistic about your expenses now you’re single. If your ex-wife chooses to keep the $500,000 house, she may become house rich and cash poor. As the ex-husband, it probably does not make sense for you to buy another $500,000 house when you are only 5-15 years from retirement.

Maximize the retirement cash flow from your share of the financial assets. If you deposit funds in a private pension fund and can wait five to 10 years, you may get triple the annual income compared to the bank, bonds, or stock dividends.

Minimize your investment risk. You just lost half your financial assets due to divorce and can’t afford to lose 25-50 percent in the next stock market crash.

Find a life partner to live with but think very hard before getting formally married again. It really is cheaper for two to live together than separately.

Dr. Harold Wong earned his Ph.D. in economics at the University of California/Berkeley and has appeared on over 400 TV/radio programs. Contact him at 480-706-0177 or Check for future free educational seminars at

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