Will Gray Divorce Destroy Your Finances?
Many people in Florida who are considering divorce worry about how dissolving their marriage will affect their finances. Although most married couples who are thinking about divorce already are living separate and apart—and thus paying their own bills and managing a household on a single income—the prospect of divorce can renew financial anxieties. For Floridians who are nearing the age of retirement or have retired recently, the financial effects of divorce can seem particularly salient. According to a recent article in Bloomberg, getting divorced at age 50 or older can “destroy” your finances and can produce “a major financial shock.”
But does divorce after 50—also known as a “gray divorce”—really need to be so damaging economically? We want to discuss the article and to provide some tips for mentally preparing for the financial consequences of divorce.
Financial Impact of a Gray Divorce
Getting divorced does change a person’s finances. As the Bloomberg article emphasizes, even the extremely wealthy will experience a shift in finances after a divorce. For those who are age 50 and older, the financial effects of divorce often are more extreme.
According to Susan Brown, a “gray divorce” researcher at Bowling Green State University who co-directs the National Center for Family & Marriage Research, getting divorced later in life can have extreme effects on a person’s economic circumstances. As Brown explains in new research, “if you get divorced after age 50, expect your wealth to drop by about 50 percent.” In addition, many people should anticipate an income “collapse” after a gray divorce. Women tend to be harder hit than men.
Dealing with the Financial Anxieties of Divorce
How can you help to keep potential economic setbacks of divorce in perspective? An article in USA Today provides some of the following tips to individuals of all ages who are thinking about dissolving their marriages and are worried about finances:
- Recognize the immediate financial setbacks of divorce—if you experience them—likely will result in a great long-term benefit;
- Avoid taking financial advice from people who do not have to make the same decisions that you are making;
- Try to keep information about your divorce between yourself and your attorney;
- Seek financial advice about your divorce only from professionals, including your Orlando divorce lawyer and any financial advisors with whom you might work;
- Consider hiring a financial planner who can help you to budget for your divorce and to stay on track financially once your divorce is finalized;
- Use apps or other services to keep track of your budget, your income, and your expenses (apps that help you to track what you spend ultimately can assist you in saving more money each month);
- Know your financial budget, and do your best to stay on track;
- Learn about additional health insurance coverage that may save you money in the long run if you have high-cost medical bills;
- Establish credit on your own in order to be eligible for loans, your own mortgage, and other lines of credit;
- Consider taking an online class on finances if you were not intimately involved in managing the finances during your marriage;
- Open a savings account and work toward saving even a little bit each month; and
- Try to relax as much as possible, recognizing that you are in a transition phase.
Contact a Divorce Attorney in Orlando
Are you considering divorce? Do you need help dealing with the financial aspects of your divorce, from property division to alimony? An experienced and compassionate Orlando divorce attorney can assist you. Contact Anderson & Ferrin today to learn more about how we help individuals and families in Central Florida.