Report: Gray divorce may cause financial distress for many in Ohio

Gray divorce can impede retirement and potentially put people at greater risk of poverty, which makes minimizing losses during these divorces crucial.

Today, many people who get divorced in Hamilton do so later in their lives. USA Today reports that in 2010, one-quarter of all newly divorced American couples were over the age of 50. From 1990 to 2010, the divorce rate among this age group more than doubled. Unfortunately, reports indicate that these increasingly common "gray divorces" often introduce unique financial stresses, putting people at greater risk of poverty and other issues.

The difference gray divorce makes

The Dallas Morning News explains that gray divorce can be so financially damaging because of its timing. Divorce can be difficult financially at any age, since it leads to legal costs and the increased expenses associated with living alone. However, people who divorce earlier in life may have decades to make up for these losses. Older adults who have limited working years left often have more trouble recovering after divorce, even if property division is fair or spousal support is awarded.

According to The Chicago Tribune, the preliminary results of a study conducted in Ohio suggest that gray divorce leaves people in significantly greater danger of living in poverty. The research, which focused on people who divorce at or after age 62, produced the following findings:

  • About 4 percent of married couples in this age group live at or below the poverty line.
  • The risk of poverty more than triples for divorced men, with 14 percent of these adults living in poverty.
  • Divorced women face the greatest risk of financial distress, with 30 percent of these women living at or below the poverty level.

In light of these findings, it is not surprising that gray divorce often has adverse effects on people's ability to retire. According to USA Today, funding a sole retirement, rather than contributing to a joint one, can cost up to 50 percent more. As a result, after gray divorce, many people must postpone retiring or return to work. Sadly, even with these measures, people who previously left the workforce or gave up job opportunities may have trouble covering these increased costs.

Reducing financial losses

People who are divorcing later in life can take a few proactive steps to protect against this financial distress. According to USA Today, working with a financial planner to create a realistic budget is important. This measure can help a person determine what kind of financial settlement to pursue during the divorce. Minimizing legal costs, potentially through options such as divorce mediation, can also help reduce overall losses.

The Chicago Tribune notes that a growing number of older couples are seeking alternatives to traditional contested divorce. Divorcing spouses can often benefit from collaborating or using mediation to reach an arrangement, especially when there are complex assets involved. Besides reducing legal costs, reaching a settlement outside of court can allow for easier division of pensions, retirement plans and similar property.

Before entering into litigation, divorcing spouses should consider discussing the option of mediation with an attorney. An attorney may be able to advise spouses on whether mediation is a feasible solution and assist spouses in reaching a mutually beneficial agreement.

Keywords: Gray divorce, financial distress, Reducing financial losses, divorce mediation, traditional contested divorce, financial stresses, spousal support.