50 Going On 20: “Grey Divorce” Brings Special Considerations for Women

According to the American Bar Association, Americans over the age of 50 make up one quarter of all divorces, and one in 10 divorces are couples over 65 years old. While the life events leading up to a divorce are often out of your control, the way you live your life afterwards, ladies, is in the palm of your hands.

The emotional weight of going through a divorce is challenging enough but just as concerning is the financial impact that follows. If women have not been living a financially independent life alongside their joint financial life, they may find themselves in a trying situation with money. Establishing yourself as an independent party is critical. An easy way to begin your new, independent lifestyle, especially with your finances, is to think SOLO:

• Create a bare necessities budget. Identify expenses that are absolutely crucial to you getting through this transition period. It may mean dropping some familiar comforts or penny-pinching for a short time while you adjust to your new life. This adjusted bare-bones budget will reveal areas that are life-sustaining (home, food, childcare) versus areas that you can layer back in once you are stabilized in your new independent life.

• Open credit accounts in your name only – “solo” accounts (a small line of credit, for example). Establishing your own credit history can take some time, but in the end, it will benefit you by allowing you to take the reins of your financial future. Don’t forget to close joint accounts with your ex-partner as soon as possible to avoid any of your exspouse’s financial decisions having a detrimental impact on your new life.

• Open savings accounts in your name only – “solo” savings. Build up that ‘rainy day fund’ if you do not already have one. Begin to make consistent deposits of at least 20% from any regular income sources so you can begin to understand your own cash flow situation and spending limits.

Once you have the foundations in place, begin to make smart use of the tools to which you have ready and easy access. For example, many people neglect to seek financial advice from a professional during this transitional time, which can be a costly mistake. Professional and trustworthy financial advice during a big change like a divorce can make a significant difference.

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Other items to safeguard are assets you may have forgotten about that can be used as additional funding for your new life. For example, an engagement ring sold at a discount or a piece of artwork can be great resources for funding that ‘rainy day’ account or for other emergencies (think attorney fees that have accrued, or a larger-than-expected down payment for a mortgage on a new home due to lower qualified individual income).

One last important item to remember is to update your beneficiary designations on your pre-existing and new investments, retirement plans, life insurance policies and estate planning items. You will want to ensure that the decisions regarding the individuals to whom all of your personal assets will go are entirely your own. Mid-life divorce is full of challenges but, with thoughtful planning and careful decision-making, female divorcees can begin to take control of their newly independent lives –especially their financial ones! 2

By Laurie Grube, Senior Vice President, Tompkins Community Bank