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‘Grey divorce’ poses higher financial risk for women than men

Divorces among middle-aged and elderly people pose a higher financial risk to women.

In stark contrast to reports indicating that divorce rates among young adults are on the decline, researchers have noted that divorce rates have alarmingly increased among the middle-aged crowd. “Grey divorces” – defined as divorces among those age 50 and older – have skyrocketed in the past 30 years, according to a 2022 study from The Journals of Gerontology by I-Fen Lin and Susan L Brown.

Typically, divorces at this age will negatively impact women more than men in heterosexual relationships, the economic effects in particular are reportedly “less severe” for men. In their research, sociology professors Laura Tach and Alicia Eads found that middle-aged men may even experience an income bump after their divorces.

The financial setbacks middle-aged female divorcées face are largely informed by the social norms of their generation, with women in younger generations being more likely to work well into middle age than their Generation X counterparts. Archaic social norms perpetuated in past decades like men being the sole breadwinners and providers inform the economic disadvantages that “grey divorces” impose on women.

“Grey divorce operates as a chronic economic strain,” Lin and Brown wrote.

Not only that but there’s also the more glaring impact of the gender wage gap, in which women tend to be paid less than men across the board in the US, despite being equally as capable. These middle-aged women statistically tend to have less savings as well, putting them at a disadvantage especially if they haven’t retired quite yet, and relied on their spouses to supplement their income.

Because they’re not pooling together their income with their spouses anymore, reports indicate a divorcée’s standard of living is more likely to drop a whopping 45 per cent, while men experience a decline of 21 per cent. Researchers identify the standard of living as the degree of wealth and material comforts accessible to individuals. Divorcées can remedy the decline in their standard of living by remarrying, however, only 22 per cent of them will remarry as opposed to 37 per cent of men.

Future generations of women in heterosexual relationships are encouraged by financial professionals to take a more active role in their finances, instead of relying on their spouses to manage it by themselves. In the event of a divorce, having a backup plan will leave them on better financial footing.

This means keeping tabs on their household’s spending, savings, as well as mortgage payments and interest rates, so that if and when a divorce is on the table example, women will know what exactly to expect. Having a backup plan no matter how steady a relationship may be is crucial because there’s no telling what can happen in the future.

Prenuptial and postnuptial agreements are also recommended and can ensure not only the protection of vulnerable financial assets but also potentially guarantee compensation for those who took time off of work to care for their children.