Turn a “Gray Divorce” Into a Sunny Future

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STORM CLOUDS GATHERING

Divorce reduces a person’s net wealth by an average of 77%. That’s no doubt a huge blow to anyone’s financial future. I often wonder if those numbers run even higher in affluent areas like Fairfield County, where accumulated wealth can needlessly be lost in an oftentimes contentious “winner take all” mentality.

For those divorcing over age 50 (known as a “Gray Divorce”), the financial implications can be daunting and complex. Choosing the right path can make all the difference between building a comfortable retirement for both spouses or becoming just another sobering statistic

“I’m not doing well…I don’t know if I can survive this.”

Excerpt from client email with her permission

JOIN THE CROWD

If you are facing or considering a divorce over age 50, you’re not alone. The Gray Divorce rate has doubled since 1990, and researchers predict it will triple by 2030. Reasons for the trend include the fading social stigma of divorce, longer lifespans, and easier online dating, to name a few. For women over 50, the key challenge to overcome is that of financial independence. After divorce, men statistically hold more than twice the wealth of their ex-spouse. While women often struggle to maintain their original income or reenter the workforce, men continue to see their income rise. Studies also show that women in this age bracket are less likely to remarry, which is, statistically, one of the most dependable paths to financial recovery.

WOMEN OVER FIFTY - ALL IS NOT LOST!

There are some bright spots in this picture. One thing to remember is that where there is continued income, alimony is often granted after a long-term marriage. And even if you were a stay-at-home spouse, you can still expect to receive some Social Security as early as age 62 (spoiler alert – not always the best strategy) and Medicare at age 65. These benefits will be there for you, even if your former spouse remarries.

Additionally, from an overall “wellness” standpoint, over the long-term women often fare better than their male counterparts, with an openness to seek out help, and connect to available support systems and resources in their community.

“Oftentimes the most dramatic and exciting recovery stories I witness are from my clients in their 50s, 60s and even 70s.”

Amy Polacko, Divorce Coach and Founder of Freedom

Warrior and Strong Savvy Women

RAINY DAY STRATEGIES

Now, right now, is when you can change the course of your future.

Planning is Essential. Take a moment to understand your options. Where do you start? Think of your attorney as a surgeon, and your Financial CDFA is your diagnostician. Would you go directly to surgery before taking x-rays or an MRI? This would be an unnecessary and unwise waste of resources and time. Divorce is no different. For those divorcing over age 50, minimizing your spending and protecting your resources is critical, particularly given that these assets are often a major future income source through retirement.

While divorce has multiple facets, financial, legal and emotional, the key strategy is to be prepared. Knowing and understanding your current asset and income structure and the potentials for your financial future will help guide you through the other paths more seamlessly.”
Marianne Charles, Charles & Boni-Vendola, LLC

Understand Your Options. An important aspect of planning is in gaining a better understanding of your options. Despite popular belief, there are many approaches to consider, and your path doesn’t always have to include adversarial litigation. Particularly with Gray Divorce, digging into the potential for mediation or a more collaborative approach can be a worthwhile time and money-saving exercise.

Of course, each situation is unique. Throughout the planning process, the right professional can help you to determine which path may be most appropriate for your family and needs.

Be Tactical. For those divorcing over age 50 there are specific items that will need consideration. All assets are not created equal, particularly when you may soon be drawing upon funds from IRA’s or taking Pension Plan distributions. Tax implications of taking retirement income, timing and strategy for taking social security, getting a handle on future healthcare costs, and estate planning are key in Gray Divorce. Knowing with certainty which assets are sustainable for you to take on is key…is getting that second house in your best interest? The right financial plan will take all of these key items into consideration.

Part the Clouds, Get to the Sun

While a financial plan is not sexy, it is often exhilarating and liberating once completed. This begins with identifying your specific needs for living expenses, healthcare and life insurance, and the retirement income needed to fulfill your dreams. Taking an inventory of all assets and liabilities and existing and projected income streams (a mandatory step for any divorce process) is also important.

Gray Divorce is unique in the sense that you are dealing with decades of accumulated wealth. Future earning capacity for most, may be limited. You want to get it right.

Knowing that your dreams are financially attainable (if even those dreams look different) can be an exciting gift.

To that end, be sure that you have a financial advisor who can take the time to understand your unique situation. Knowing what your financial future will look like, even if that picture is different from what you initially imagined, can be a valuable gift.

If you’d like to learn a bit more and hear some personal and financial success stories from other local women who are happily on the other side of their own Gray Divorce, I hope you will consider joining us for lunch, and some spirited, confidential conversations!

LUNCHEON

From Gray Divorce To A Brighter Future

Personal & Financial Success Stories

Wednesday, April 27, 2022

12pm-1:30pm

New Canaan, CT

RSVP for more details to jen@waterwaywealthadvisors.com

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