Starting over after divorce at 55 and older

Rebuild your life after a grey divorce

As much as you may hope for an ideal marriage and the perfect, ‘till death do us part’ lifetime with your spouse, it is possible that feelings or priorities can change. Whether you have been together for four months, four years or 40 years, life after divorce is never easy. However, starting over after divorce at 55-plus presents certain unique challenges that are not only emotionally draining but may also impact your retirement finances (divorce after a retirement pension can be especially challenging financially).

While there is no recent data available for the 55-plus divorce rate in Canada, as per Statistics Canada in 2017, more than one million divorcees were over 55 years old. Instead of spending their retirement years stuck in unhappy marriages, many individuals are making the bold choice of a late-life divorce. In fact, some are even choosing to divorce after 50 years of marriage.

What is grey divorce?

Typically, grey divorce refers to divorce at 55-plus, or divorce after retirement. Many of these individuals struggle with the question, “How shall I go about rebuilding my life after divorce”?

Separation from a spouse can drain you emotionally as well as financially. It can even affect your retirement plans, which can add further stress. Relieve yourself from the financial stress of divorce by doing things you love.

Are you at a similar stage, where you’re happy to consider divorce after 50 years of marriage, or divorce after 55? Are you thinking of spending your retirement alone, or with someone other than your spouse? We provide some information to help you know more about the potential costs and consequences of starting over after divorce at 55plus and how to survive financially and emotionally.

The financial drain on after grey divorce: how much does it cost?

From court fees, legal fees and documentation charges, to expert reports, counselling and other litigation expenses, there are several costs that can add up when you look into starting over after divorce at 55-plus or younger. What is grey divorce going to cost you?

1. In case of an amicable separation, you can avoid lengthy negotiations in court, and spend as little as $5,000 to $10,000 to go through the separation formalities. File your own divorce application for a fee of $300 to $450, based on your province. This usually includes the application charges and registration fees. Make sure to check your province’s rules to see what this cost could be for you.
2. A bitterly contested separation may lead to expensive settlements, with amounts that can go into millions, depending on your situation. In Canada, the average cost of a contested divorce is $13,638. This can be a tough sum to swallow, especially if it is a divorce after a retirement pension.

• The more complex the divorce, the more time you will spend in court. Legal proceedings can cost around $20,000 for one- to two-day sessions, and about $35,000 for a five-day trial. Including the legal fees and court charges, you could be looking at upwards of $50,000 in expenses. This can make your life after divorce at 55+ very difficult.
• The Canadian national average divorce lawyer’s fees are $1,845. The cost of additional expert services or testimonies could range from $2,000 to $15,000, depending on the nature of the requirement.

So, what is grey divorce going to cost you? If it’s not amicable, it can be tens or even hundreds of thousands of dollars.

A divorce at 55 or beyond is inevitably a drain on your finances. In addition to the legal costs of getting a divorce, you may want to keep in mind the expenses associated with sharing your assets and liabilities.

• Division or liquidation of property or other physical assets, as well as settlement of your outstanding mortgage
• Treatment of joint bank accounts, co-owned investments, vehicles and other assets
• Sharing of retirement and social security benefits
• Custody and support for children, if they are not yet legal adults, a possibility in a late marriage.
• Other costs related to managing the home, vehicle, insurance and personal expenses

How to survive a grey divorce financially – start by keeping your legal costs low

In order to contain your expenses, consider family mediation, or check your eligibility for provincial programs that offer free counsel and legal aid to individuals in a certain income bracket. A systematic account of your financial position will simplify the dialogue between you and your spouse, and help you avoid expensive, long-drawn litigation. This can make life after divorce at 55-plus far more bearable.

For this purpose, create a comprehensive list of your assets and liabilities, including:

• Insurance policies, pension statements and annual tax returns
• Information on all registered accounts, such as your RRSPs, LIRAs, TFSAs and RESPs
• Details of all the properties you own/co-own, along with mortgage statements, current property assessment, property tax statements, utility bills, maintenance and repair work receipts, and rental income statements (if applicable)
• Information on all your outstanding debts, loans and lines of credit

It is important for both people going through a divorce when in 55-plus (or younger) to have a good understanding of their personal and shared finances before going through official divorce proceedings. If you’ve never been exposed to household expenses before, you may be in for a shock when it comes to managing the costs of living alone and somehow surviving divorce after 55-plus or younger. You may want to gather all the relevant information and use the divorce calculator for Canada to know more about the support payments that you may be eligible to receive.

The emotional drain: coming to terms with life after divorce at 55-plus

Although divorce is tough at any age, a late-life separation from your spouse, can be particularly stressful, especially divorce after 50 years of marriage or so. The deep, sentimental shared family history is something that you may never be able to let go of completely. In addition to the loss of a long-term partner or companion, you may also have to brace yourself for a dwindling set of extended family and mutual friends. You may experience:

• Loss of familiar surroundings: unless there is a decision to cohabit, even after a divorce, one of you may have to say goodbye to the neighbourhood, long-time neighbours and local, social activities that you were part of
• Degradation of relationships: in a common social circle, your friends may find it difficult to continue communicating with either you or your spouse

Overcoming the psychological trauma of life after grey divorce

What is grey divorce likely to do to your mental health? For people who divorce in their 50s or divorce in their 60s and older, the sudden loss of family, friends, home and neighbours, along with the financial burden of life after divorce may have a huge psychological impact. This could lead to both physical and mental distress that may manifest itself in several ways, including:

• Withdrawal from social interactions
• Stress eating or aversion to eating
• Low self-esteem or distorted body image
• Sleep deprivation
• Constant irritability or fatigue
• Ignoring responsibilities or lacking focus in routine activities
• Frequent crying

In fact, the National Population Health Survey report indicates that the two-year period after the end of a relationship poses a high risk of depression for the divorced couple. While you have the option of seeing a divorce counsellor, coping with the psychological effects of starting over at 55 after divorce (and older) may be a long, tedious process. However, if you are thinking positively and looking at rebuilding your life after a grey divorce, there are various ways to move forward.

Learning to cope with the emotional fallout after a grey divorce

For many people, surviving divorce after 55 can be a lot like grieving. They can feel shock, anger and extreme sadness. The extent of these feelings can depend on whether they were the one to instigate the divorce or not, but even people who choose to divorce after 50 years of marriage can be surprised to find that they still feel a sense of loss and bewilderment.

There are a number of things you can do to get through the emotional difficulties of life after divorce at 55:

• Join a support group made of people who are surviving divorce after 55 (or 60, or 70-plus). Meetup.com is a great resource for finding these groups: search for “divorce and separation support + your local area”. Alternatively, ask your doctor for a recommendation.
• When dealing with divorce at 55 or older, self-care is really important, so try and keep to a regular exercise routine, eat healthy foods (and not too much), avoid alcohol and make sure you get enough sleep.
• Surviving divorce after 55 is easier if you can keep busy with positive activities that bring you joy and spend time with loved ones who don’t offer unsolicited advice. Well-meaning friends’ advice can often be counter-productive when you’re trying to get over a grey divorce.
• Seek counselling. If you’re struggling to recover from feelings of sadness, anger or isolation (which are quite typical when starting over after divorce at 55-plus), ask your doctor to refer you to a counsellor experienced in working with divorced retirees. Your doctor’s office may even have a social worker/counsellor on staff.
• If you think you may be depressed, see your doctor. This can happen particularly for people starting over after divorce at 55-plus, who didn’t choose to separate from their spouse. Your doctor will be able to assess you for depression and recommend the best course of action.

The impact of grey divorce on your retirement finances

Gisèle Harrison, a Clinical Social Worker in private practice in Windsor, Ontario, works with numerous older divorcees and finds that financial difficulties are often a key issue. “Some of the people I see had a plan to retire at 55,” says Ms. Harrison. “But then divorce comes along and throws their retirement plan back a decade”.

So, what exactly are the financial effects of a divorce after a retirement pension has started up? Is it possible for someone with a modest retirement fund to survive a divorce financially? Here are some aspects that may give you a better perspective on your situation:

• Pooling and division of assets: a divorce in your retirement, or close-to-retirement years, could mean that your asset pool is mostly static. The division of such assets can be challenging, especially if you have to part with a substantial portion for spousal or child support. Living separately will come with its own set of costs, since you may now have to re-acquire or separately own the previously shared assets, such as homes, monthly payments, vehicles, appliances and other lifestyle requirements. At a time when you were planning to relax and count on the savings from your nest egg, you may be faced with some financial stress. This can make starting over after divorce at 55 and beyond a major challenge.
• Treatment of the marital home: A key consideration in your divorce would be the treatment of the marital home. Based on your financial situation, you may want to:
  • Buy out your share of the property and retain the home for sentimental reasons
  • Liquidate the property and share the proceeds
  • Continue to cohabit under the same roof, even after divorce
• Retirement funds and taxes: If you have been contributing to the Canada Pension Plan (CPP), you may have to look at the pros and cons of collecting your CPP benefits before or after you reach the age of 65. Divorce after a retirement pension is received can be less financially challenging. Although starting later than 65 will give you more pension per year (up to 42% more if you wait until you’re 70), your financial situation at the time of divorce may dictate how soon you need to start collecting. Another consideration is that CPP is taxable, and early withdrawals may create a higher tax burden than if you wait until you’re 65.

Starting over after divorce at 50+? Learn how you can survive and thrive

Despite all its downsides, many Canadians are able to lead a happy life after divorce.  Surviving  divorce after 55 financially, and rebuilding your life thereafter, can be easier if you follow these few tips:

• Keep your divorce costs low: use a mediator for your late-life divorce
  • Not only will that save you a lot of money, but with professional intervention you will be able to separate with integrity and keep the process as smooth as possible
• Become finance-savvy:
  • Surviving divorce after 55 can be especially challenging if your spouse always took care of the finances
  • Learn the basics of finances from simple, self-help books, such as “Love & Money” by Jeff D. Opdyke, “Women and Money” by Suze Orman or “Dumping Debt” by Dave Ramsey
  • Check out Marion Korn and Eva Sachs’ “When Happy Left Sally”. This book specifically addresses the challenges of starting over after divorce at 55-plus and offers suggestions to successfully navigate a late-life separation
  • Take advantage of the free financial literacy initiatives organized by the Canadian Bankers’ Association, specifically for retired Canadians
    • The program includes free seminars and online advice on cash management, financial abuse and protection from fraud
  • Realign your finances: consolidate your various assets, investments and insurance policies with a trusted advisor who ensures that your financial plans align with your new situation
    • This will also help in easily updating your beneficiaries in all the relevant areas and keeping management fees in check

If you’re concerned about starting over at 55 after divorce (and older) and how you’ll cope with finances, you can count on HomeEquity Bank. Our CHIP Reverse Mortgage^® allows you to cash in part of your home’s equity, without having to make monthly payments. You could use the extra funds to buy out your spouse’s share of the marital home or boost your pension income and ensure that your retirement plans stay on course.

If you are considering or going through a divorce, you shouldn’t have the added stress of your financial future to think about. The CHIP Reverse Mortgage could be the financial solution for you. Call us at 1-866-522-2447 or  try our reverse mortgage calculator to see how much tax-free cash you could qualify for.

¹Figures mentioned below are sourced from: https://www.nbc.ca/personal/advice/budget/how-much-does-a-divorce-cost.html