The divorce rate in Canada is declining, says Statistics Canada in its most recent report on the subject from 2020. It said there were 5.6 divorces per 1,000 marriages, compared to 10.1 in 2010.[1] In terms of the actual number of divorces, the 42,933 total in 2020 was the lowest since 1973.[2] Two key societal changes contributed to the drop in the divorce rate observed over the last three decades:
- aging of the married population, and
- a lowered tendency to divorce among younger married adults in particular.[3]
Compared with younger adults, divorces for those 50 years and older, sometimes dubbed "grey divorce," remains a rare event. The divorce rate in this age group rose by 26% between 1991 and 2006 (from 4.2 to 5.3 per 1,000). It has remained stable since, despite the lower values for 2020.[4]
Whatever the cause, it pays to take a pragmatic look at your financial situation when looking at a separation. Those impacted by grey divorce must consider:
- the assets they will end up with, and
- the income they will have to sustain them through retirement.
This is very different from younger people going through a divorce who have many income-earning years ahead.
4 tips to make it through late-life divorce
- Keep your emotions in check. Ending a marriage with discipline and a certain amount of objectivity is important to keep your finances in order. Unwinding a life of 20, 30 or 40 years together is emotional and takes time and patience. Try to frame things logically. Engage the help of trusted experts like lawyers or advisors. They can help you approach the situation in a practical way. Focus on the outcomes for each person rather than trying to “win at all costs.” An emotional reaction of trying to win can cause hardship for the family involved. It can also increase the legal costs associated with your divorce.
- Understand your current financial picture. Ensure you know where you stand financially with all income, debts, assets and liabilities. When dividing family assets, consider the income you each require for the rest of your lives. Remember there will be a lifestyle adjustment as you transition to life on your own. You may need to make sacrifices such as taking fewer vacations or downsizing your home.
- Revisit your estate plan. Change the designated beneficiaries on assets such as your RRSP, pension plan or insurance contracts. This is something that can be overlooked, resulting in assets going to an ex-spouse unintentionally. Revise your will and power of attorney documents as soon as possible.
- Be cautious on your next chapter. Be wary of jumping into a new relationship too quickly. Ensure you have given yourself time and space. Ensure that before you pursue a new committed relationship, your own financial needs and assets are protected.
Work with an advisor
Sitting down with a trusted advisor can help you process this significant change in your life. An advisor can help you make a list of “to dos” to get on track. An advisor can also help you create a financial plan that reflects your new situation.
Information contained in this article is provided for information purposes only. It’s not intended to provide or be a substitute for professional, financial, tax, insurance, investment, legal or accounting advice and should not be relied upon in that regard. It also does not constitute a specific offer to buy and/or sell securities. You should always consult your financial advisor or tax specialist before undertaking any of the strategies discussed in this article to ensure that all elements and your personal circumstances are taken into consideration in developing your individual financial plan. Information contained in this article has been compiled from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to its timeliness or accuracy and SLGI Asset Management Inc. disclaims any responsibility for any loss that may arise as a result of the use of the strategies discussed.
1-4 www150.statcan.gc.ca/n1/daily-quotidien/220309/dq220309a-eng.htm
