Adjusting to life after divorce later in life can be one of the most challenging life events, comparable to coping with loss, relocating, facing a major illness, or experiencing job loss. While these changes can be overwhelming, the way we approach and manage them plays a crucial role in how we move forward.

Is Grey Divorce on the Rise?

Yes, it is. Despite a general decline in divorce rates since the 1990s, the number of divorces among long-term marriages has been increasing. More couples are deciding to part ways later in life, with 32% of divorces in Australia now occurring after the age of 50, according to Australian Seniors and the ABS.

This phenomenon, often called "grey divorce," has been influenced by longer life expectancies, evolving societal norms, and shifts in personal priorities. Many individuals reach a stage where they reassess their happiness and decide to pursue a different path.

Once children have grown and financial obligations shift, some couples realize they no longer share the same goals or values, leading them to part ways.

While starting over can be daunting, many individuals find that with the right financial and emotional support, they can embrace new opportunities and create a fulfilling new chapter in their lives.

Key Financial Impacts of Divorce

Divorce at any stage of life has financial consequences, but divorcing later in life presents unique challenges. Many couples have accumulated assets over the years, making division complex and, at times, contentious.

Superannuation and Retirement Savings

Superannuation is generally considered an asset in divorce settlements, meaning it can be divided between partners, even without being withdrawn. While splitting super isn’t mandatory, it is crucial to include it in a settlement, as it plays a key role in long-term financial security. However, dividing super can significantly impact retirement plans, potentially reducing a once-comfortable nest egg.

If one spouse has accumulated significantly more super than the other—often the case when one partner has taken time off work for caregiving responsibilities—there may be financial inequality post-divorce. Seeking financial advice to restructure superannuation and ensure financial stability moving forward is essential.

Asset Division and Property Settlement

Aside from the emotional toll, asset division can be complex. Homes, investment properties, and self-managed super funds (SMSFs) containing assets such as property, business holdings, or collectibles can complicate settlements. Some assets, like property, can’t be easily liquidated, and shifting assets from tax-effective structures such as trusts or superannuation accounts can have tax consequences.

A significant decision many individuals face post-divorce is whether to keep or sell the family home. While holding onto a home may provide emotional comfort, the financial feasibility of maintaining it should be carefully considered. Costs such as mortgage repayments (if applicable), and maintenance should factor into the decision.

Government Benefits and Centrelink

A change in marital status can affect eligibility for Centrelink payments, pensions, and other benefits. A spouse who was previously ineligible for benefits due to household income may now qualify, while those who were receiving benefits as a couple may see changes in thresholds and entitlements.

Engaging a financial professional to navigate these changes can help ensure you receive the appropriate support and maximise available benefits.

Divorce is Expensive

Life post-divorce often comes with higher individual expenses. Costs that were once shared—such as rent, utilities, and groceries—become the sole responsibility of each party.

This financial reality underscores the importance of reassessing financial strategies and adjusting to a new budget.

How Can You Rebuild Financial Stability Post-Divorce?

1. Update Superannuation and Estate Planning

Ensure your superannuation death nominations are up to date. You may need to remove or change beneficiaries.
Review your Will to reflect your new circumstances and ensure your assets are allocated according to your wishes.
Consider updating or establishing a power of attorney to designate someone to manage financial matters if needed.

2. Reassess Your Retirement Strategy

Develop a plan to rebuild or manage your superannuation, investments, and income streams.
Consider salary sacrificing or making additional contributions to super to help rebuild savings if you are still working.
Explore different investment options that align with your new financial goals and risk tolerance.

3. Adjust Your Budget and Retirement Expectations

A change in household income may require adjustments in spending and saving habits.
Downsizing, relocating, or making lifestyle changes could help free up financial resources for the future.
Reevaluate insurance coverage and healthcare costs, ensuring you are adequately protected.

4. Explore Centrelink Entitlements

Your eligibility for Centrelink benefits may have changed, and you might qualify for assistance that wasn’t available to you pre-divorce.
Seek advice on pension entitlements, income tests, and asset thresholds to optimise your financial position.

5. Evaluate Debt and Financial Risks

Carefully consider whether taking on new debt—such as a mortgage to re-enter the property market—is necessary or financially viable.
Be mindful of financial risks, avoiding large speculative investments or overextending financially in an attempt to rebuild wealth quickly.
If struggling financially, seek professional advice before making major financial commitments.

6. Seek Professional Guidance

Navigating financial decisions after a grey divorce can be overwhelming, and seeking professional financial advice is key to making informed choices. A financial planner can help assess your financial position, provide strategies to rebuild wealth, and develop a roadmap for long-term security.

While divorce later in life presents challenges, it is also an opportunity for financial independence and a fresh start. Many people find that, with the right planning, they can achieve financial stability and even greater personal fulfillment than they experienced in their previous marriage.

Remember, the sooner you take action, the better positioned you’ll be to secure a positive financial future.

About Us

After working as an advisor for a decade, Joel founded Unified Wealth.

Unified Wealth specialises in helping clients who are facing life’s big decisions.

Whether you’re contemplating your first property, growing your family or starting your investment journey we can help you focus on the simple steps to help you make your goals reality.

Our priority is making sure you have all the right information available to make the best possible decisions for you and those you love.

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Unity - We are most effective when we work together as a team

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At Unified Wealth our team is highly experienced and provides goal-based advice and solutions for a range of advice strategies.

Speak to our team today.

Navigating Divorce After 50