Chicago, IL – Divorce can have devastating effects, both emotionally and financially, especially for older Americans. Kimberlee Davis experienced this firsthand when she got divorced from her husband of over 20 years in her early 50s. Moving from the U.S. to England for her husband’s career, Davis found herself having to start over in her home country with no credit history and having to rebuild her career in finance after years of caring for her children. The divorce process was prolonged, leading to significant financial costs for both parties as they untangled their lives.
Now at the age of 65, Davis reflects on how the decision to divorce had a profound impact on her economic well-being. Finding employment proved to be a challenge at first, but she eventually secured a job at Morgan Stanley, working as a financial advisor and author. Despite her success, she continues to play catch up with her retirement savings, highlighting the lasting consequences of a gray divorce.
The phenomenon of “gray divorce,” where couples separate after the age of 50, is becoming more prevalent in the U.S. statistics show that almost 40% of those getting divorced are in this age group. For older couples, the process of divorce can be particularly complex due to the accumulation of assets over decades of marriage. Each spouse has limited time to rebuild their finances before retirement, which can have significant implications for their financial security in the long run.
The division of retirement accounts, such as 401(k)s, IRAs, and pensions, can be a costly and messy affair for older couples going through divorce. Additionally, the partner who may have had a lower-paying job or stayed at home to care for children may see a reduction in their Social Security benefits post-divorce. The financial implications of gray divorce are especially pronounced for women, who are more likely to face financial challenges due to factors such as exiting the workforce during their prime earning years.
Despite the challenges, there are ways to ease the process of gray divorce. Having individual financial advisors and lawyers can help both parties navigate the complexities of dividing assets and planning for their financial future. Maintaining transparency and knowledge of all assets and accounts throughout the marriage can also help alleviate some of the financial burdens associated with divorce.
Ultimately, while gray divorce can bring about significant financial strain, there is also room for growth and new opportunities. Davis’s story serves as a reminder that despite the challenges, it is possible to rebuild one’s life and find fulfillment post-divorce. By taking control of their finances and planning for the future, individuals going through gray divorce can pave the way for a brighter tomorrow.