divorce after 50

It’s one of those statistics that is both surprising and, well, not surprising.

Baby Boomers, the generation that led the charge into no-fault divorces in the 1970s and 1980s, continue to lead other age groups in divorce into their retirement years.

In fact, boomer divorce rates are speeding up. A recent Pew research study found that divorce among those age 50 and older has doubled since the 1990s, to 10 from five per 1,000 couples.

For those 65 and older, that rate has tripled, to six from three per 1,000. Younger age groups had more total divorces but saw less of an uptick in the same period or, in the case of those under 40, a relative decline.

Nor have older Americans been shy about getting remarried and then divorced once more, Pew found. Among all adults 50 and older who split up in 2015, 48% of them were in a second or later marriage.

Try, try again? Perhaps. There seems to be a strong desire among aging couples to get their final chapter right, one way or another, even if it means breaking up a decades-long relationship.

So-called “gray” divorce can be simpler. Children are typically adults and independent. Dividing up assets is a solvable problem.

However, as Paul Sullivan writes in The New York Times, recent tax law changes might throw aspiring singles a financial curveball.

Big impact

For one, how the government treats alimony is different. The spouse who must pay can no longer deduct the cost, while the recipient no longer has to claim the alimony as income.

As Sullivan notes, for wealthy folks the loss of a large one-time deduction can have a big impact on taxes in the year you divorce. It might be tens of thousands of dollars’ worth, enough to change the divorce negotiations.

Another tricky issue is the family home. In states with high local taxes, owning the home used to be an advantage, thanks to their deductibility. The recent tax law introduced caps on those deductions. That could lead to the family home simply going on the market and downsizing by both parties.

Finally, if there are dependents still in the house, their value as tax deductions is less. The $4,050 personal exemption for each dependent is gone, even as the child tax credit doubled to $2,000.

Nevertheless, having costly kids in your home could tip college financial aid decisions in your favor. Talk to your tax advisor before making any decisions, of course.

Divorce is never easy, but it happens. Consulting a financial planner, such as we have at Rebalance, before making major life decisions can be an important step that protects your savings for years to come.

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