The phenomenon even has a name: the Gray Divorce Revolution.
You see, the divorce rate among couples over 50 has doubled in the last 20 years. The causes? All the traditional ones, for sure: infidelity, boredom, growing apart and so forth.
But, more and more, it’s because of an eye-opening statistic. According to the Social Security Administration, anyone who is 65 years old today has a 25% chance of living past 85 and a 10% chance of living past 90.
So maybe the husband has reached retirement age or has had to take early retirement because of the economic downturn. He’s sitting at home thinking, “What am I going to do for the next few decades? I’m not sure I even know this woman who’s fixing lunch for me every day and asking me every five minutes what I’m up to. I’d better find something to do, maybe start a home business. But is this who I want to do it with and for?”
Or maybe the wife has reached her fifties after raising her kids and is thinking, “Is this all there is? What about me? I have another 30-plus years ahead of me, a whole second adulthood that needs to be filled.” (Following the first one that may have left her unfulfilled.)
Besides, after setting her own dreams aside while she made her family her first priority, she’s beginning to dream again. She’s having thoughts of discovering her life purpose and leaving some sort of legacy. And what was important in a partner when she married 30 years ago may not be what she’s looking for today.
So the ground is fertile for separations and divorces. And whether her separation is amicable or not, whether the financial implications are good or grim, a whole new financial life is about to start.
Suddenly she is part of a very large statistic: she’s a “divorced female.” Either by choice or by circumstances.
Now is when she’ll find out how well she learned the lessons of adeptness and comfort with money as she was growing up. How far she developed her concept of personal responsibility. Whether enough of her self-identity has survived the years.
Now is when she has to hold the financial reins firmly in her hands.
So, besides having to ensure enough income to support herself, she has to put five things in place, whether she stays on her own or eventually finds someone else to share her life. She needs to:
- Identify her lifestyle going forward based on a long-term vision, deciding how simply or extravagantly her resources and her dreams permit her to live. (And then, what will make her happiest.) Life after divorce is not a continuum of how it was before. The blackboard has been erased and now it’s time to redesign what she wants her future to look like.
- Open an online savings account with a minimum of $1,000 in cash, readily accessible, just as an emergency fund. Whatever her financial situation, this is the most important “peace of mind” gift she can give herself. It’s not meant to help close out months if she comes up short; it’s there for when a true little emergency rears its head. It will. And she’ll be ready. (Think about the control that represents …)
- Build a fund equal to 6-8 months of expenses as fast as possible. Regardless how financially prepared she thought she was as she got out of her marriage, it’s now doubly important to stay on top of her finances. With this fund she knows that she can bridge any structural challenges, like job loss, late alimony payments or whatever.
- Find a financial course or mentor to bring her up to speed if she has any doubts at all about how to handle her money. There’s no room in the new economy for financial ignorance. She doesn’t need to become a financial wizard, but she does need to be comfortable with her numbers, for today and for the future.
- Revisit all the important documents that will have become obsolete as a result of the divorce. This includes her will, living will and any advanced directives. It’s time to be sure to change beneficiaries, next of kin for notification and authorized decision makers.
The (divorced) Boomer woman. She was a rule-breaker as she was growing up, from shattering social mores to rejecting any limitations on what she could do with her life.
Now it’s time for her to break the rules again: it’s time for a generation of women to finally enter its later years empowered around money. Not dependent. Not scared. Empowered.
Bio: Sharon O’Day is a speaker and writer who today focuses on the relationship women have with money. She’s a global finance and marketing expert with an MBA from The Wharton School. Sharon has dedicated the last 10 years to understanding the specific money issues that hold women back from reaching that much sought-after goal: financial peace of mind.