Financial issues that can come with a gray divorce

“Gray divorce” refers to the increasing trend of older couples ending their marriages. This type of divorce is becoming more common in North Carolina as life expectancies continue to increase and more people reach retirement age with assets and retirement savings to protect. However, a gray divorce can present a range of financial issues that can be challenging for both parties.

Division of assets

One of the primary financial issues with gray divorce is the division of assets. Older couples often have accumulated a significant amount of assets over their lifetime, including homes, retirement accounts, stocks and other investments. Dividing these assets can be complex, especially when one spouse has been the primary breadwinner or when one spouse has control over most of the assets.

The process of dividing assets can be time-consuming and emotionally draining, and it can also result in a significant loss of financial security for both parties.

Retirement planning

Another financial issue with gray divorce is retirement planning. Retirement is a critical stage in life, and it’s crucial to have a solid financial plan in place.

However, a gray divorce can throw a wrench into retirement planning as both parties may have to adjust their expectations and re-evaluate their retirement goals. The division of retirement accounts can also result in significant tax consequences, which can further complicate the process.

Social Security benefits

Gray divorce can result in a loss of Social Security benefits because they are calculated based on the highest 35 years of earnings. The calculation is based on the primary wage earner’s income.

If a spouse who earned less than their partner during their marriage divorces after reaching retirement age, they may not be eligible for Social Security benefits based on their former spouse’s record. This can result in a significant loss of income for the lower-earning spouse and make it difficult for them to maintain their standard of living.


Finally, gray divorce can also have an impact on healthcare. Older couples may be relying on each other for health insurance coverage, and the loss of that coverage can be devastating. Divorcing couples will need to find alternative ways to pay for healthcare expenses, which can be a significant financial burden, especially for those who are already retired and living on a fixed income.

Gray divorce can present a range of financial issues that can be challenging for both parties. It’s crucial for older couples to understand the financial consequences to ensure that they safeguard their rights and fulfill their obligations.