Contact Us for More Information

What Does The Term Gray Divorce Mean, How Can It Impact Your Retirement Assets, And What Can You Do To Protect Yourself?

Posted by Corey F. Schechter | Dec 02, 2016 | 0 Comments

Contributing Author: Dianne Schechter

The phrase “Gray Divorce” refers to divorces involving spouses over the age of 50 and who are typically members of the Baby Boomer generation.  While the overall divorce rate has declined over the past 20 years, it has dramatically increased for this segment of the population.

Approximately one (1) in four (4) divorces in 2010 involved couples who were 50 years of age or older – doubling the divorce rate for that age group since 1990.  These facts have resulted not only in the coining of the term “Gray Divorce,” but also the need for middle-aged and older individuals to understand the unique retirement-related issues that can affect someone divorcing later in life.

First, it is important to understand why this trend is happening.  There are several factors at play when it comes to Gray Divorce.  People are living longer and the prospect of remaining in an empty relationship does not bode well for many people.  They are allowed to act on changing their future.  Other reasons for Gray Divorce center on finances.  For example, studies have shown that Gray Divorce is related to the increasing economic independence of women.  Many no longer have to choose between a bad marriage and poverty. 

Regardless of the reason(s) for a couple divorcing, it is important to understand that a divorce later in life results in less time for both people to recover financially and continue to save for retirement or to maintain their lifestyle if already retired.  According to Howard Hook, CFP, CPA (who was named Best Financial Advisor by Medical Economics Magazine) after a Gray Divorce, the retirement you planned may not be as comfortable as you intended, or worse yet, may even need to be postponed.

Your retirement assets may not be enough for both parties to maintain their accustomed standard of living.  It is more expensive for two people to live separately than two people living together.  When a couple's retirement assets are divided in a divorce, each spouse may have to face the decision to either delay retirement, save more money for retirement, or reduce their standard of living.

Additionally, the early depletion of retirement funds to supplement income is a risk.  If a spouse needs an immediate source of income, or is awarded an asset (such as a home or a business) that costs more to maintain than they can ultimately afford, that person may end up using retirement funds to make ends meet.  This poses a serious risk of not having enough retirement savings when he or she actually retires.  It is also important to consider the tax implications of accessing retirement funds, such as tax penalties and fees incurred for withdrawing retirement funds prior to age 59 ½ . 

When dividing retirement assets in a Gray Divorce, you need an experienced ERISA attorney to help you take precautions to minimize the chance you will have to deplete your retirement savings.

If you are currently going through the process of a divorce or legal separation, or are thinking about filing for divorce or legal separation, and either you or your spouse is a participant in a retirement plan, contact one of our highly qualified attorneys for a free consultation regarding either the preparation of your QDRO or the review of a QDRO previously prepared.

About the Author

Corey F. Schechter

Corey Schechter practices in the areas of Employee Benefits, Employee Stock Ownership Plans, Pension and Profit Sharing Plans, ERISA, ERISA Litigation, Business Law, Qualified Domestic Relations Orders (QDROs), and Employment and Labor Law.


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Retirement Plans

We help establish a customized plan that meets regulatory requirements as a tax qualified plan. Following implementation, our attorneys can assist clients and their plan administrator with regular reviews and updates to help with regulatory compliance for the plan's operation, and continued effectiveness in meeting the client's specific goals.


We are dedicated to employee ownership. When you come to us for ESOP services, you receive influential legal counsel who stand beside you to help you stay informed, in compliance, and abreast of the latest developments-all to help you realize your plan goals as fully and effectively as possible.


A QDRO is a specially designed court order that is required for the division of retirement benefits in a family law case. Many family law attorneys do not possess the expertise necessary to divide retirement benefits or stock options upon divorce. We have extensive experience in dividing qualified plans, government plans, IRAs and stock options between the employee spouse and non-employee spouse.

Butterfield Schechter LLP provides the information in this website as a service to its clients and visitors to the site. This website is for information purposes only and is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The information in this website is provided "as is," and while the information in this website is updated periodically, additional facts or future developments may affect subjects contained herein, and no guarantee is given that the information provided is correct, complete, or up-to-date. Seek the advice of professional counsel before acting or relying upon any article, form, or information in this web site. To ensure compliance with the requirements imposed by the United States Treasury and the Internal Revenue Service, we inform you that any federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of: (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another person any transaction or matter addressed herein. Butterfield Schechter LLP has endeavored to comply with all known legal and ethical requirements in compiling this website. In the event that this communication does not conform with any laws or regulations of any state or country in which it may be received, Butterfield Schechter LLP will not accept legal representation based on this communication from a person in such a state or country. Electronic mail is provided as a convenience in communicating with the attorneys at Butterfield Schechter LLP. Contact by e-mail does not alone create an attorney-client relationship. Please remember Internet e-mail is not secure and messages sent to the firm or any of its employees or attorneys should not contain sensitive or confidential information. Thank you for visiting our site.