The price of grey divorce
The end of Bill and Melinda Gates’ 27-year marriage sent shockwaves around the world. From a distance, their union looked picture-perfect. Wealthy, philanthropic and seemingly without a care in the world.
Despite appearances, after almost three decades creating a life together, Bill and Melinda have joined the growing number of couples embarking on a ‘grey divorce’ — a term used to describe couples who separate after 50.
And they’re far from alone.
Data from the Australian Bureau of Statistics shows that, although the divorce rate in general has decreased1, the median age of people divorcing is increasing. It now sits at 43.1 for women and 45.9 for men, compared to 38.2 and 40.9 in 1999.2
That means a lot more people heading into retirement solo.
So, why are over-50s breaking up?
Couples going through more than just a rough patch often stay together for the sake of their children. But once the kids move out of home, the pressure to stay in a loveless marriage is gone.
Although retirement is something most of us look forward to, sometimes that’s the very thing that unravels a relationship. When couples are still working, they can be like passing ships in the night.
Lorraine, a retired medical receptionist, says that stopping work forced her and her ex-husband to take a second look at their relationship.
‘When Bryan retired, we were suddenly spending 24 hours a day together. For over 35 years, we’d both been so busy – me working part-time and running the kids around, him working long hours. It sounds like a cliché, but we’d almost become strangers. We had nothing in common. We didn’t even really like each other anymore!’
Lorraine can laugh about it now, but at the time, she didn’t know how she’d survive once her marriage ended, particularly from a financial point of view.
The financial effect of a grey divorce
We won’t lie, divorce isn’t easy at any age, but it can be especially hard if you’re approaching retirement and looking to secure a stable retirement income.
Your fifties are often the time when you finally get to pay off your mortgage and experience financial freedom. A mid-life divorce can set you back to square one, except you don’t have a 35-year career ahead of you to pay off a new mortgage.
That’s why it pays to have a plan.
ASIC’s Moneysmart website has a comprehensive Divorce and separation financial checklist, which covers everything you’ll need to think about when planning for life after marriage. It includes:
- bills and paperwork
- accounts and legal documents you’ll need to update, including your Will
- where you can go for legal advice
- sorting out your mortgage
- dividing your property and assets
- managing your income and expenses
- deciding how to care for your children
- where to go for help if you're experiencing domestic violence and/or financial abuse.
What happens to super in a divorce?
Under family law, when a marriage or de facto relationship breaks down (except for de facto relationships in Western Australia), super can be split through a super agreement between you and your ex. If you can’t agree, the Family Court decides.
Update your super account
If you divorce, there are a few things you'll need to update.
- Your super can't be included in your Will, so it's important to update your beneficiaries to reflect who you'd like your super to be left to if you were to pass away. See our Nominating your beneficiaries fact sheet.
- You may have moved, so make sure to update your contact details. You can do this in Member Online.
- If your name has changed, you can complete our Change your details form.
- Review any insurance you have in your super. You can do this in Member Online.
Divorce can be daunting, particularly when you’re emotionally vulnerable. The more support you have from a trusted source, the more confident you can be about moving forward.
As a Spirit Super member, you have access to advice from our super experts to help you plan your financial future. Whether your needs are simple or more complex, we can help.
We offer three levels of advice:
- general advice - help with the super basics
- intra-fund advice - making your super work for you and
- comprehensive advice - financial advice that's tailored for you.
'When I had to start dealing with the financial side of things, I wondered if separating was a mistake’, Lorraine reflects. ‘Bryan had always handled the bills and bank accounts. The best thing I did was asking for help and getting professional advice. It’s been a couple of years now, and I feel like a new person. I’m back on track with my finances and enjoying life again.’
Get in touch
If you’d like to chat with a Superannuation Adviser or set up a meeting with a financial planner, call us on 1800 005 166 or email firstname.lastname@example.org. We're here to help.
1In 1999, the crude divorce rate in Australia was 2.8 divorces per 1,000 estimated resident population. By 2019, this rate dropped to 1.9. https://www.abs.gov.au/statistics/people/people-and-communities/marriages-and-divorces-australia/latest-release#key-statistics
2The median age at divorce is now 45.9 years for males (compared to 40.9 in 1999) and 43.1 years for females (compared to 38.2 in 1999). https://www.abs.gov.au/statistics/people/people-and-communities/marriages-and-divorces-australia/latest-release#key-statistics
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