The Increased Divorce Rate for the Over 50 Population

Linda Cao, one of SMI’s esteemed curators notes down her thoughts on the article about the increased divorce rate for the over-50 population.

I agree with Cary Carbonaro on how women in the over-50 age group are driving divorce and divorce rates are surging. I’d like to add that another reason for the surge of grey divorces initiated by women is attributed to the fact that women of the baby boomer generation have increased financial independence and power compared with the previous generations of women who are traditionally homemakers and financially dependent on their husbands. Therefore, they feel more empowered to end a marriage that doesn’t work for them.

In grey divorces, the financial settlement is the elephant in the room and the most critical part of the negotiation. Women need help from a financial planner to set reasonable expectations and know what they need to ask for before divorce and what new financial reality they need to adapt to after divorce.
Besides holding onto a house and a lifestyle she can no longer afford for too long, there are a few more considerations for divorced women during this transition:

• How to adjust personal spending post-divorce. The traditional professional advice given to a divorcee is to cut back expenses immediately and significantly. However, adjusting to a lower standard of living in a cold-turkey manner is painful and may not be helpful for her emotional healing. I usually give them 1-2 years of “exploration” period that builds more flexibility in their budget, allowing them to rediscover themselves and find new purposes, lifestyles and identities she is comfortable with. One of my divorced clients chose to travel more often to new places to release and recharge, the others chose to stay in their current home for 1-2 years or rent a beautiful new home as the transition home. But they understand in a few years, they need to make more spending adjustments to secure their financial future.
  
  
• What to do when receiving a large amount of cash settlement. It’s important to manage expectations for self and loved ones and have a plan and agreement in place on how to use this money in the long run. Women divorcees who are not used to having a large amount of cash at hand can make the mistake of seeing it as a windfall and start to be too generous with their kids and family, either out of their own emotional needs or out of pressure. That’s putting other people’s interests above their own and creates a dangerous pattern/expectation from others that they would regret later.

As a professional advisor, having our own experience going through a bad divorce brings valuable perspectives, but we need to be mindful not to project our own experience to other divorcees because the transition is very personal, and the journey is different for each person. Coaching skills are important to “normalize” their feelings, be non-judgmental and empathetic, encourage them to take baby steps one at a time and celebrate their successes, no matter how small they are and how long they take.