There’s a strange thing happening in America right now.
Divorce is falling. It just hit a 50-year low.
Except for one group.
People over 50 are splitting up more than ever.
And among people over 65, the divorce rate has quadrupled since 1990.
There is even a name for it now. Gray divorce.
That just means a divorce that happens later in life, often after decades of marriage.
Almost nobody sees it coming.
And almost no retirement plan is built for it.
This Isn’t a Marriage Column
Let me be clear about something up front.
I am not here to talk about your marriage. That is your business, not mine.
I am here to talk about your money.
Because a split later in life is one of the biggest financial events a person can go through, and hardly anyone plans for it.
And if you are happily married, stay with me anyway.
The same math that makes a late divorce so hard is the same math that shows up when one spouse passes away.
One of those two things happens to almost every couple. So a plan that only works for two people is really only half a plan.
You have built a life and a nest egg with your spouse over 30 or 40 years.
That is a real accomplishment. Most people never get there.
But here is what the numbers say happens when that partnership ends late in the game.
It Sounds Like Just a Legal Problem. It’s Not.
A recent study from Allianz found that 49% of divorced people say it knocked their retirement off track.
And 59% of people who are still married believe a divorce would hurt their retirement.
They’re right to worry.
When a marriage ends after 50, the damage is not shared evenly.
A woman’s standard of living drops about 45% on average. A man’s drops about 21%.
And more than 1 in 4 women who divorce after age 63 end up living in poverty.
Those are not small numbers. They are life-changing numbers.
And most of that damage is not caused by the divorce itself.
It is caused by the fact that nobody planned for it.
Why I Read This Differently
I read a story like this differently than most advisors do.
When my father died, I was 13 years old.
His business was doing well on paper. Within months, it was gone.
There was no plan and no backup. Just a family that had to figure out life with a lot less, almost overnight.
That is the shock my whole system was built to prevent.
A gray divorce is that same shock.
It arrives a different way, but the result can look the same.
One household. Half the income.
And a plan that was drawn for two people who are no longer both there.
Here is the part that gives me hope, though.
I have watched couples go through this and land on steady ground.
Not because they avoided the split, but because they planned for the possibility on purpose, long before a lawyer was ever in the room.
What Actually Happens When Two Becomes One
When a two-person plan turns into a one-person plan, several things change at the same time.
Here is what almost nobody warns you about.
Your savings usually get cut in half. What used to support one household now has to support two.
You go from filing your taxes as a married couple to filing as a single person.
That matters more than it sounds.
A single person pays a higher tax rate at a lower income.
And the standard deduction, which is just the slice of your income the government does not tax, is smaller.
So you can end up paying a higher rate on less money.
Two Social Security checks can become one.
But here is a piece of good news most people never hear.
If you were married for at least 10 years, you may still be able to collect a benefit based on your former spouse’s work record.
And it does not lower their check at all. That one rule can be worth thousands of dollars a year.
The names on your accounts do not update themselves.
Every retirement account and life insurance policy has a beneficiary.
That is simply the person you listed to receive it when you pass away.
If you never change it, your ex could still inherit the whole thing, even years later.
And while all of that is happening, the bills barely move.
- The house costs the same.
- The property tax is the same.
- The insurance is the same.
- Your income was cut in half. Your fixed costs were not.
The Solo Second Act Test
So here’s what I want you to do this week.
Married, single, or somewhere in between, this is worth ten minutes at your kitchen table.
I call it the Solo Second Act Test.
Three questions.
Answer them honestly. Not the answer you hope for. The answer that is actually written down in your plan today.
One. What would your monthly income be as a single household? Do you know the number, or have you never run it?
Two. What would you owe in taxes on that income, filing as a single person, with the higher rates and the smaller deduction? Does your plan account for that?
Three. Who is actually listed to receive your retirement accounts and life insurance right now? Not who you assume. Who is written down on the form.
If any of those three questions stopped you cold, your plan works for two of you. Not one.
Where This Fits in the Plan
This is why two steps of my Life-Tested Retirement System work together here.
The first is Life Season Mapping. It does not build one plan for one future. It runs two futures side by side. The one where you are both here, and the one where you are on your own, by loss or by choice. You look at both before either one happens.
The second is what I call Wealth Transfer Engineering.
That is the quiet, behind-the-scenes work. Making sure the right names are on the right accounts. Making sure that if a retirement account ever has to be split, it is done the correct way so it does not trigger a surprise tax bill. Making sure your estate actually goes where you want it to go.
Done early and on purpose, these turn a hard day into something you can manage.
Done in a courtroom, in a hurry, they cost far more and protect far less.
The Best Time Was Before You Needed It
None of this is about expecting the worst. It is about being honest.
A plan built for two people has to be able to work for one.
Because one day, by loss or by choice, it may have to.
That is not a scary thought. It is just a true one. And the people who face it best are the ones who built for it early.
If any of the three questions from the Solo Second Act Test stopped you cold, let’s talk.
Click here to schedule your complimentary Retirement Resilience Assessment call.
We will look for the weak spots in your current plan.
Your income, your taxes, your protection, and whether the plan can stand on its own if it ever has to.
You will walk away knowing exactly where you are exposed, and what a stronger, one-person-ready plan looks like.
The best time to build that plan was before you needed it.
The second best time is right now.
Best regards,
Jonathan Peters
Sources
- Allianz Life 2026 Annual Retirement Study: “Gray Divorce Trend Threatens Retirement Security” (49% say divorce derailed retirement; 59% of still-married expect an impact). https://www.allianzlife.com/about/newsroom/2025-Press-Releases/Gray-Divorce-Trend-Threatens-Retirement-Security
- WJLA / Sinclair Fact-Check Team (2026): “Why ‘gray divorce’ is rising even as overall divorce rates decline” (65+ divorce quadrupled since 1990; overall divorce at a 50-year low). https://wjla.com/news/nation-world/fact-check-team-why-gray-divorce-is-rising-even-as-overall-divorce-rates-decline-baby-boomers-generation-x-financial-security-marriage
- RBC Wealth Management: “The gray divorce: Financial considerations for older Americans” (standard of living drops about 45% for women vs 21% for men; about 27% of women over 63 fall into poverty after a split). https://www.rbcwealthmanagement.com/en-us/insights/the-gray-divorce-financial-considerations-for-older-americans
- Social Security Administration: benefits for a divorced spouse when the marriage lasted at least 10 years, with no reduction to the ex-spouse’s benefit. https://www.ssa.gov/benefits/retirement/planner/applying7.html
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