Working vs. Non-Working Spouses in a Gray Divorce

A late-in-life divorce may be either empowering for a woman or devastating psychologically and financially. In the past, married older women did not earn a substantial, if any, income through work outside the home, so the husband was considered to be the “breadwinner.” He had the higher income; the wife was the “non-breadwinner.” In a divorce, these distinctions become even more clear than they may be in the marriage.

Who earned the money becomes more problematic for spouses who have been married for 30+ years when they decide to end the marriage. In a gray divorce, for example, the husband, 65, has been the breadwinner in the household; the wife, 60, was a homemaker who has raised children, now adults, and supported the husband’s career.

Both spouses wanted to retire in their sixties; however, because of the divorce, retirement may need to be postponed and the financial resources of the parties need to be stretched to support two separate households. The divorce means the loss of health insurance for the wife because his insurance covers her. They have a home with a mortgage. They need very careful financial planning to ensure the best possible decisions during the divorce. Bankruptcy would be disastrous. The advancing age of the couple requires review and changes to estate plans, insurance and life plans.

When divorcing, these spouses face real world issues concerning retirement, job opportunities, the financial strain of two households, declining health and increasing health insurance and health expenses. Each has legitimate concerns about how to financially manage.

The wife may never receive future assets or income other than the divorce award. A settlement that meets estimated current and future financial needs might not always be feasible, which means she will have to work. The breadwinner faces similar difficult choices. At 65 he may be unable to retire due to support obligations he may owe to his wife. Resolving such challenges is typically at the heart of a successful gray divorce.

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