3 Financial Moves Every Older American Must Make After a Split

Americans are living longer, but that doesn’t mean their marriages last longer too. Divorces are becoming more common for older adults, forcing them to reimagine their futures after decades of shared financial planning.

The 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement found that while overall divorce rates are slightly declining, “gray divorces”—those among adults aged 65 and older—are on the rise.

With gray divorces, divorcees often face unique challenges because they have to unravel decades of shared financial planning.

“Financial recovery is harder in your 50s or 60s, not just because of fewer working years left, but because you’re recovering from more than just financial loss,” said Ed Coambs, a certified financial planner and founder of Healthy Love and Money. “There’s the emotional impact of rebuilding your identity, often after decades of shared decision-making, goals, and roles.”

Here are a few important moves in order to successfully from a late-stage divorce.

1. Get the Full Picture of Your Finances

You need to understand your full financial landscape as a couple before making any big decisions. Sit down and take inventory of everything. This includes debts, retirement accounts, real estate, insurance policies, and any joint or individually held accounts. Having a clear picture will help you navigate the divorce process and make informed decisions about your financial future.

“Collect all necessary information to build a detailed statement of all assets owned, and all debts owed, by the marital household,” said Dan Reiter, a certified divorce financial analyst and certified public accountant at Prosperity Planning. “In other words, the marital balance sheet or net worth statement.”

This statement will be required in the divorce process anyway, and it will give you an idea of your assets after separation.

“Again, in almost every state, a net worth statement is a requirement of the divorce process and is included in the divorce financial affidavit,” said Reiter.

At this phase, you should gather your financial documents, such as tax returns, bank statements, investment account records, mortgage documents, and credit reports. Having these materials organized will not only help you understand your current standing but also prepare you for meetings with legal and financial professionals.

2. Review and Adjust Your Financial Plan

According to the Allianz study, 35% of married baby boomers said that a divorce would derail or set back their retirement plans. Divorce can have a significant impact on your retirement plans, potentially requiring individuals to reassess how large their retirement nest egg is and how much they’ll need need to live comfortably during retirement.

Once you understand your current financial picture, revise your budget to reflect single living. With a change in household income, you may need to adjust your spending habits and looking for ways to downsize to avoid unnecessary financial strain later down the line.

“Depending on the divorce settlement, you may need to make substantial lifestyle changes post-divorce, and with a gray divorce, you may no longer be working or it may be hard to go back to work at an income to support yourself and you don’t have as long of a timeline to recover financially,” explained Jamie Clark, certified financial planner and founder of Ruby Pebble Financial Planning. 

Don’t forget to update beneficiaries on retirement accounts, insurance, policies, and estate documents to reflect your new circumstances. Otherwise, your former spouse could still legally receive funds from your retirement account or life insurance policies after you die.

“After a gray divorce, someone over 50 should review and update their beneficiary designations on all retirement accounts,” Coambs said. “Many people forget that divorce doesn’t automatically change who inherits their IRA or 401(k),”

Many people assume that gray divorce is purely a setback. But there are also potential upsides. For example, depending on the length of the marriage, you can receive Social Security benefits based on your former spouse’s earnings.

“A late-life divorce can have lasting implications for Social Security, pensions, and spousal benefits, but it can also open up options,” Coambs explained. “For example, if you were married for 10+ years, you may still be eligible to claim Social Security benefits based on your ex-spouse’s earnings, without reducing theirs.”

3. Build a Team

Consider consulting a financial advisor or financial planner with experience in post-divorce planning. They can help you set new financial goals and ensure you’re on track for long-term stability.

You might also want to speak with a tax professional and an estate planning attorney. Divorce will change your tax situation and requires updates to legal documents, including your will.

“The biggest mistake I see people make when navigating retirement planning after a gray divorce is when the spouse who was less engaged in the finances during the marriage does not hire a good team to help them understand what their retirement planning looks like now that they are divorced,” said Clark. 

The Bottom Line

A gray divorce doesn’t have to mean financial disaster. The sooner you reassess your financial plan, the more time you have to adjust to this major change and rebuild. However, you need a proactive, strategic approach to ensure financial stability after separation.

“People can recover and even thrive—but it requires an honest look at spending, earning, and what truly matters now,” said Coambs.