Jean and David had been planning their retirement for many years. They both had pensions at their jobs, had saved a lot in their 401k plans and had paid down their mortgage to the point where they almost owned their home. They had friends and hobbies that they both were looking forward spending more time on when they finally stopped working.
However, David had been playing out with his band at various bars and weddings which is probably where he met his new lady friend. Jean found out and after much drama, they got divorced. Now this new reality threw a major monkey wrench in their well thought out retirement plans.
This is the new reality for so many seniors these days. The Pew Research Center reported in 2017 that the divorce rate for those over the age of 50 has doubled since the 1990’s. Further, for those 65 and older, the divorce rate tripled from 1990 to 2015. A late-in-life divorce create massive challenges financially. Why is this happening?
1) Its easy for couples to grow apart. Maybe both people work 40 plus hours or travel for business where there’s overnights involved. Now suddenly these 2 strangers are living together with all this time on their hands. Either they reconnect or maybe they’ve grown apart so much that they don’t really have anything in common anymore. My client Joan lived in the same house with her ex husband for years because neither could afford to move out. He lives on the second floor that has a private entrance and pays her a small amount of rent to cover the expenses. They still live like this now after 20 years of retirement.
2) No more children at home . A lot of retirees start to figure out they were a “couple” based on the lives they created around their children. Once they become “empty nesters” spouses can realize that’s all they had in common and may feel distant.
3) Retirement. “My husband is driving me crazy” is something you may hear from the wife who has been spending time by themselves and her newly retired husband is disrupting that life at home or leisure. The normal routine is not so normal anymore and life is so different now.
4) Health issues. Maybe a spouse’s health has gone downhill and the “in sickness and in health” vow that was taken is not so important anymore. Maybe someone wants to trade in the old model for a newer one. This can lead to lifestyle differences in which someone wants to go out an do things– hiking, biking, tennis etc while the other is ok with being home and relaxing in front of the computer or Netflix.
5) Mid life crisis. We all have regrets in our lives. Now that you are free and have lots of time on your hands in retirement you may not want to spend the next 20 years tethered to someone who makes you unhappy or isn’t experiencing the same life changes you are. Standing looking back at your life you realize you’ve been living for just work or just family and you’ve had enough. The next 20 years are going to be different and you may feel you need to live more for you. So you get a new hairstyle and a convertible because you’re free free free! There may be a cost to that as a late in life divorce can gut your 401K plan or split that rich pension payment you’ve worked hard for. That beach house with the water view you dreamed of living in when you retired is a condo with a view of the highway.
Do most couples plan on divorce? Usually no. But now there’s alimony to pay, your IRA has been divided up, and you have to find an apartment or another place to live. The amount of income you thought you were going to get has been compromised. Not only that where do you spend the holidays? How do your kids feel about this? Maybe they side with one spouse or the other. Harsh reality but very true.
My client David ended up marrying his new lady friend which led to another divorce. Statistics show that second marriages are less stable than first ones. Now he’s got a new job because he needs the income and seems OK but there’s an unhappiness to him that wasn’t there before. Also there’s a lot of his money that isn’t there anymore either.
Jean on the other hand , has devoted herself more to grandchildren and family and seems to feel like the divorce was a good new beginning to the rest of her life. She spends time with her friends more than she did when she was married so sometimes these things work out. She sold the family home and used the money to generate an income for herself . But once again there’s an underlying feeling of loss that neither she or David ever planned for. As their financial advisor I have to admit I never saw it coming either.
Sorry gentle reader not all of these blogs have a happy ending. I have another client named Stuart-always full of sage advice– who is fond of saying “no matter who you marry, you want to make sure they love you just a little more than you love them.” I will sign off with that choice bit of wisdom.
Jeff Dragon 
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