Divorce is a time of immense stress – mental, emotional, and often financial; and this can be exacerbated when you find yourself separating from your spouse in your twilight years and unnervingly close to retirement. A recent story about a South African couple that had been together for 56 years and divorced in their 80s caused a bit of a stir on social media recently.
Thank you for reading this post, don't forget to subscribe!And while divorcing at that age is not common in South Africa, the divorce rate over the age of 50 has been steadily rising.
Commonly referred to as the ‘grey’ divorce, it is a trend that has been growing globally and the financial implications can be devastating, especially for women. The right financial advice can keep one on track with their financial goals despite the disarray divorce can bring to your life.
In data reported annually by Statistics South Africa through its Marriages and Divorces report, both male and female divorcees over the age of fifty have steadily increased over the last decade.
While divorce later in life brings unique challenges for both genders, it tends to have a more profound impact on women. Gender inequalities play a major role in why this occurs; women statistically earn less than men for the same amount and level of work, lowering their overall lifetime earnings. This has a knock-on effect on retirement savings among women, making them even more vulnerable in the wake of a late-life separation.
Women facing ‘grey divorce’ navigate a range of complex and often overwhelming financial considerations, such as dividing retirement funds, understanding their entitlements under South African law, and re-evaluating their retirement goals.
Have those hard financial conversations
While it may seem counter-intuitive or gloomy, especially for those who are happily married, to prepare for the possibility of divorce in later life before marriage is wise. In fact, seeking professional financial advice early can help mitigate the financial consequences in the event of a separation. It is important to initiate those hard financial conversations early on in a relationship and develop open communication channels regarding money in your relationship.
Protect your financial health
“Divorce can lead to a substantial reduction in household income, increased living expenses and legal fees, all of which can significantly impact your savings and financial health,” said Leonie O’Connell, a financial adviser at Momentum Financial Planning. “The division of assets, including retirement funds and property, can further complicate financial stability.”
Marriages in community of property, for instance, stipulate a split down the middle when it comes to dividing up belongings, properties and assets. However, the same applies to liabilities, which means that one spouse’s debt also becomes a shared burden by law. Alternatively, under an ante-nuptial agreement without accrual, each spouse retains their individual assets, but the division of these assets can still be contentious and become heated. Understanding these legal frameworks is essential for a woman to protect her financial future. Having the right financial adviser can play a big role in ensuring that you are protecting your financial health for you and your family.
Estate Planning
Be aware of your rights, such as entitlement to a share of a spouse’s pension fund or how maintenance may be structured after a long-term marriage. Take practical steps, like reviewing retirement plans, understanding investments, and having a clear picture of both the current and future financial situation. It’s also wise to maintain an updated estate plan and make informed decisions about insurance and healthcare coverage.
According to O’Connell, “Money is complicated, especially when it comes to the intertwining finances of a married couple. Seeking the advice of a credible and trustworthy financial adviser can help you navigate the complexities of divorce settlements, asset division and long-term financial strategies. And do it in a way that works for your life and relationship.”
Divorce is a distressing time in anyone’s life, but a ‘grey’ divorce may cause extra stress because the time to retirement is short, and in some cases divorce happens during retirement. Having a financial adviser can help with ‘proper planning and guidance.