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Financial planner Debbie Hartzman says it’s important for seniors going through “silver separation” to take some steps to protect themselves financially. (Fernando Morales/The Globe and Mail)
Financial planner Debbie Hartzman says it’s important for seniors going through “silver separation” to take some steps to protect themselves financially. (Fernando Morales/The Globe and Mail)

As more seniors seek ‘grey divorce,’ reconsider your retirement plans Add to ...

During a nearly two-decades long career, financial planner Debbie Hartzman has doled out her share of savvy money advice to clients going through divorce.

What may be surprising is that in the last few years she’s been seeing more and more clients in their 60s, 70s or even 80s.

According to Statistics Canada, the phenomenon of “grey divorce” – or separation in one’s senior years – has been steadily increasing overall.

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In 2008, the most recent year for which statistics are available, there were 852 divorces where both partners were 65 and over, up almost three per cent from two years earlier.

There were 1,237 divorces where women were aged 65 and over, slightly down from 1,247 in 2006, but 2,486 divorces where men were in that age bracket, up from 2,415 two years earlier.

And some experts say these rates will keep going up as the Baby Boomer generation continues to age.

Recently one of Ms. Hartzman’s clients, a woman who had been married for 35 years, found out her husband was leaving her.

“Her husband came home on a Monday and said ‘I don’t love you anymore. I’m leaving,’” said Ms. Hartzman, a member of the Financial Advisors Association of Canada with a private practice in Kingston, Ont.

The couple had only $2,000 left to pay on their matrimonial home but then he dropped a bomb on her: he had secretly used their joint line of credit and bought a new home for himself.

Ms. Hartzman says it’s important for seniors going through “silver separation” to take some steps to protect themselves financially.

1. Prepare for a change

Going from a double-income to a one-income household will take some adjustment at any age. But for seniors who were looking forward to a set retirement date or living off a fixed income, it will feel a little hard to take at times.

“The largest impact on anybody in that age bracket when separating is the fact that they’re not in their asset gathering years, they’re in their asset-depleting years,” said Ms. Hartzman.

“Their lifestyle is hugely diminished because there’s no possibility of future growth and income.”

2. Know your financial situation

One of the biggest mistakes some of her clients make is not making themselves aware of their financial situation.

Usually in long-term relationships, one person was in charge of the finances. Upon divorce, the spouse who didn’t pay attention to the money might find themselves at a disadvantage.

“The other spouse is completely sidelined because they have no clue what they have, what they don’t have, how they’re living, how they’re paying their bills. It’s never ever been their concern,” she said.

“They’ve never looked after the financial aspects of their life at all and now all of a sudden, they’re having to take that over for themselves and they have no idea where they’re starting with.”

3. Have a debt-repayment plan

A poll released last month by Harris Decima and CIBC found that 59 per cent of retired Canadians are in debt.

Tina Di Vito with the Retirement Institute at the Bank of Montreal suggests senior divorcees readjust their lifestyle expectations because divorces are expensive.

“The home that they are in right now may no longer be affordable. The lifestyle may no longer be affordable,” said Ms. Di Vito.

“So it’s important to manage budget and expenses quite thoroughly. Understand where your money is going and where your money is coming from.”

4. Make sure you’re prepared for retirement

Susan Eng, national seniors advocacy group CARP, said many don’t realize the high costs associated with retirement.

Not only will you have to pay for the lifestyle you want, whether that includes travel or fulfilling other life-long dreams, but there are also added unexpected costs of home care and medical expenses.

Those who aren’t prepared for retirement will be hit particular hard if they also have to go through an expensive divorce and see their savings cut in half.

“If you were barely making it before, you’re going to definitely suffer a blow to your standard of living,” said Ms. Eng.

“There is a reality to that. There really is no good way of sugarcoating that.”

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