Grey divorce has huge impact in the retirement years

This was published 4 years ago

Grey divorce has huge impact in the retirement years

It used to be the case that having made it to retirement age, married couples were pretty much settled for life. Not any more, writes Kate Jones.

After decades of marriage, divorce is the last thing couples expect to disrupt their retirement plans. But more and more baby boomers are finding themselves single and forced to start over financially.

Grey divorce has escalated across Australia with latest Australian Bureau of Statistics data showing the average age of divorcees has increased over the past 25 years. In 2013, the average female divorcee was 42 years old while the average male divorcee was 44. This compares to 32 for women and 34 for men in 1990.

Older divorcees like Rod Nye, 71, often find themselves in a more complex financial situation than their younger counterparts.

Older divorcees like Rod Nye, 71, often find themselves in a more complex financial situation than their younger counterparts.Credit:Christopher Pearce

While the divorce rate for people in their 30s and 40s has decreased, it has jumped for those 50 and older.

Social researcher Mark McCrindle says the trend is in line with the increasing age of brides and grooms.

Divorcing later in life is becoming more common.

Divorcing later in life is becoming more common.

"We've seen the average age of marriage get later and people divorcing later," he says. "There's a couple of other factors in addition to people getting married later, including people living longer, changing careers later in life and being more active later in life.

"Once upon a time, people would have said 'I'll stick it out', but not any more."

Jacqueline Wharton from Separation and Divorce Advisors says most of her older clients separated after their children left the family home.

"The overriding message from those leavers we see is, 'I don't have much time left to live in an unhappy marriage, I want to live my life and while I don't want to hurt my family, I need to start making decisions for me'," she says.

"In other instances, clients find that once the kids leave home, they don't have much in common with their spouse. As people start to semi-retire they generally spend more time together at home, and differences in values, routines, expectations and annoying habits are highlighted and can often lead to the deterioration of a marriage."

As an increasing number of senior couples call it quits, they find themselves in a more complex financial situation than their younger counterparts.

The agony of kissing goodbye a joint retirement fund means older divorcees face the stark reality of having to rewrite their happily ever afters. Their earning heydays are behind them and opportunities to rebuild their wealth are limited.

Many older divorcees anticipate they won't enjoy the retirement lifestyle they had planned on, Wharton says.


Mark McCrindle

"The splitting of assets and debts is always difficult, but as people age and their earning years dissipate, they obviously feel more angst and are more pessimistic about how they will financially recover from divorce as compared with those who still have a long career ahead of them," she says.

As far as children are concerned, grey divorcees no longer have to worry about providing day-to-day funds for their children or face ugly courtroom battles over custody and child maintenance. Yet many are concerned about protecting their children's inheritances, particularly if one partner remarries, Wharton says.

The biggest assets to divide are the family home and superannuation. The Family Court can help couples split super through a formal written agreement, consent order or if an arrangement cannot be made, through a court order.

There is usually more angst involved in reaching a settlement for the family home, says financial planner Scott Haywood from

Both parties can seize the chance to downsize or alternatively, one partner can buy out the other to keep the family home. Both options come with serious financial risks, says Haywood.

"Today's property market is so buoyant, property prices are so high that people in their 50s and 60s are better off selling the family home, putting the money into super and taking an income from super," he says. "We are advising against buying another property, especially when both people are left with no income or capacity to earn and repay the debt."

Liquidating assets helps avoid becoming asset rich and cash poor in retirement, Haywood says. "You want an income stream that you can live off for the next 20 to 30 years and that's more important than buying out the family home."

Problems can also arise if one partner has had control of the couple's finances or has been the primary income-earner throughout a marriage. Wives who have spent 20 years raising children and husbands who've spent the same time working full-time is the common scenario for today's grey divorcees.

This means some women may not have a full grasp of the family finances and some men have an "I've worked all my life" sense of over-entitlement to the couple's assets, Haywood says.

It's important to know where documents relating to home loans, bank accounts, superannuation and insurance are located. If these documents can't be found or amicable terms can't be reached, it may be appropriate to seek help from a financial or legal professional.

Finding his feet

Rod Nye, 71, is still adapting to his new life as a single guy. After 35 years of marriage, it was never going to be easy.

"You come away and you think, 'I'm now on my own and I've lost half of everything I thought I had'," he says.

Nye was 68 when he split with his wife. It took almost a year to carve up their assets, including the family home, superannuation and two investment properties.

"It was pretty convoluted and it's all joined up," he says.

"So you have family trusts, property and super funds, so it's very hard.

"My wife used to do all the accounts, so I didn't have a bank card and that was a bit of a shock."

One of the couple's assets was a hairdressing salon where Nye, a hairdresser for 53 years, worked. After it was sold, he continued hairdressing part-time from home and it's kept him going.

"Working for the last three years has been terrific – it's my saviour," he says. "Divorce left a big hole and work fills a lot of it."

The NSW grandfather turned to several professionals to help him get through the divorce. One of those was an accountant who helped him open new bank accounts and draw an income from his self-funded superannuation.

But the self-confessed "property nut" says he has kept his own counsel on investments. "I don't need investment advice, I just go with what is prudent," he says.

"I'm not going to live as I wanted to and as I worked to do, but I can live and survive.

"You can accept the financial side. The hard side of it is the heartbreak."

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