The rising trend of gray divorce — divorces occurring among adults aged 65 and older — is reshaping retirement planning in unexpected ways. Even as the overall divorce rate in the United States shows a slight decline, the rate among older adults continues to climb. Splitting up later in life presents unique financial and emotional challenges, especially for those who have built a retirement strategy as a couple.
According to the 2025 Annual Retirement Study by the Allianz Center for the Future of Retirement, 56% of married Americans say that a divorce would derail their financial retirement plans. Among divorced Americans, 34% said their divorce set their retirement back, while 40% reported that it completely disrupted their strategy.
Why Late-Life Divorce Has a Bigger Impact
Divorce near or after retirement doesn’t leave much time to rebuild financial security. Savings intended to support one household must now stretch across two, often creating gaps that are difficult to fill. A couple who carefully planned for one shared future might suddenly find themselves funding two separate retirements, with doubled housing, healthcare, and living costs.
For those already retired, there’s even less flexibility. Assets may need to be divided, investments liquidated, and retirement timelines restructured. Kelly LaVigne, Vice President of Consumer Insights at Allianz Life, explained, “Those going through gray divorce don’t have the time to rebuild retirement savings on their own. Trying to fund two separate lives, instead of a joint one, can deplete retirement accounts faster than anticipated.”
Increased Responsibilities and Financial Stress
The financial aftermath of divorce is significant. More than half of divorced Americans (54%) say they have substantially more financial responsibilities after separating, and 41% report greater stress about money compared to when they were married. Many find themselves reconsidering their plans entirely, from delaying retirement to scaling back on lifestyle expectations.
Even younger generations recognize the risk. Nearly half of millennials (47%) worry about not having a financial plan in case of divorce, while 37% of Gen Xers share the same concern. For those already in retirement, the lack of time to recover makes the impact much more immediate and lasting.
Rethinking Retirement Planning
Gray divorce highlights the importance of regularly reviewing financial and retirement strategies. Some steps that can help mitigate the risks include:
- Keeping retirement plans flexible: Building strategies that account for unexpected life changes can make transitions easier.
- Understanding individual vs. joint assets: Knowing how retirement funds, property, and pensions would be divided in the event of divorce can help avoid surprises.
- Considering extended timelines: Those facing divorce later in life may need to delay retirement or adjust their expectations to maintain financial stability.
- Staying informed: Awareness of the potential financial and emotional toll can lead to better preparation for life’s uncertainties.
The Takeaway
Gray divorce is more than a personal decision — it can have profound financial consequences. Dividing assets and funding two retirements instead of one often leaves both individuals with fewer resources than planned. While no one wants to prepare for divorce, understanding its potential impact is a key part of building a secure, realistic retirement strategy.
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