The Financial Implications of Grey Divorce: What You Need to Know
While overall divorce rates have declined in recent decades, one demographic has seen a significant increase: couples over 50. Known as “grey divorce,” these later-life separations can have profound financial implications that differ markedly from divorces among younger couples. Here’s what you need to understand about navigating this challenging transition.
The Unique Financial Challenges of Grey Divorce
Unlike younger couples who may have decades to recover financially, those divorcing later in life face a distinctive set of challenges. With retirement on the horizon or already underway, there’s limited time to rebuild wealth and adjust financial plans.
Retirement Accounts and Pension Division
One of the most significant considerations in grey divorce is the division of retirement assets. Couples must carefully navigate:
- The splitting of 401(k)s and IRAs
- Pension rights and benefits
- Social Security claiming strategies
- Required minimum distributions
A Qualified Domestic Relations Order (QDRO) is often necessary to divide retirement accounts without incurring early withdrawal penalties.
Support Resources
United States Resources
Canadian Resources
Citations
- Brown, S. L., & Lin, I. F. (2012). The Grey Divorce Revolution. Journals of Gerontology: Social Sciences.
- Sweeney, M. M. (2010). Remarriage and Dissolution of Remarriages. Handbook of Population.