Grey divorce: separating after 55 and what it does to retirement

Separating after a long marriage carries its own kind of grief. You may be ending a relationship that has lasted most of your adult life, unpicking a shared home, shared friends and a retirement you planned together, and doing it at an age when people around you assume life is settled. It is also more common than many people think: in the US, the divorce rate among adults aged 50 and over roughly doubled between 1990 and 2015, according to Pew Research Center analysis of government data.

The financial problem is the part people underestimate. A retirement designed for one household, with one set of housing costs and one pension drawdown, now has to fund two, and there are few working years left to fill the gap. This guide sets out what is different, where the money questions are, and what to gather first.

What is different after 55

• The assets are mostly retirement assets. Pensions, RRSPs, RRIFs, 401(k)s, IRAs and the home. These are often illiquid, tax-deferred, or both, so the paper value is not the spending value.
• Income is fixed or about to be. There is no promotion coming. Support may have to be paid from pension income or savings.
• Time is short. A 35-year-old who takes a financial hit has decades to recover. A 62-year-old does not.
• Health and care become factors. Health coverage, long-term care planning and the ability to live alone all enter the picture.
• Children are adults. There is no parenting plan, but there may be adult children with strong views, and inheritance expectations that need resetting.

Pensions

For long marriages the pension is often the largest asset, and by 55 it may already be in payment. In Canada, pensions earned during the marriage are generally shared, and a pension already in payment can still be divided; in Ontario, for example, the non-member spouse can receive a share of each payment. CPP credits earned during the relationship can be split, and the closer you both are to claiming, the more visible the effect. In the US, a qualified domestic relations order (QDRO) can direct part of a workplace pension or 401(k) to a former spouse. A former spouse who was married for at least ten years, is unmarried, and is generally at least 62 may be able to claim Social Security benefits on the ex's record. Read the full guide to pensions at separation.

The key decision is often transfer versus offset. A spouse without their own pension may benefit from receiving a share of the other's guaranteed lifetime income rather than a lump of house equity, because income that lasts for life cannot be outlived. A spouse who has their own pension may prefer to keep it whole and balance the difference with other assets. Model both.

The home

Keeping the family home after 55 is often the emotional priority and the financial mistake. Qualifying for a mortgage alone on retirement income can be difficult, the upkeep was planned for two, and the equity may be needed to fund living costs. The alternatives, selling and each buying or renting something smaller, or one spouse buying the other out using pension offsets, often leave both people more secure. Work out housing cost as a share of each person's future income for every option before deciding on sentiment.

Spousal support

Long marriages tend to produce long support. Under Canada's Spousal Support Advisory Guidelines, a marriage of 20 years or more, or one where the recipient's age plus the years of marriage add up to 65 or more (the "rule of 65"), generally points to support of indefinite duration. Many US states similarly treat long marriages as candidates for long-term alimony, though several have reformed toward time limits. Two things to plan for:

• Retirement of the payor. Support based on employment income will need revisiting when the payor retires. Agreements should say how: a review at a set age, a formula tied to pension income, or a lump-sum settlement now.
• Double dipping. If a pension was divided as property, support may need to account for the fact that the recipient already received a share of that pension. The rules differ by jurisdiction. Raise it with your lawyer.

More detail is in spousal support explained.

Government benefits

In Canada, if either of you receives the Guaranteed Income Supplement, tell Service Canada about the separation, because the amount depends on marital status and income and may change. Old Age Security itself is individual. In the US, Social Security benefits on an ex-spouse's record are described above, and Medicare generally starts at 65, so anyone younger who loses employer coverage needs a bridge. Check your own statements before you settle, so the numbers in the negotiation are real.

Healthcare and benefits

In Canada, provincial health insurance continues regardless of marital status. The pressing issue is extended health and dental coverage through a spouse's workplace or retiree plan, which often ends on divorce and sometimes on separation. Price a replacement plan before you settle.

In the US the stakes are higher. A spouse covered by the other's employer plan generally loses that coverage on divorce. COBRA can usually continue it for up to 36 months, but at the full premium plus up to 2 percent. If the spouse losing coverage is under 65, the cost of coverage until Medicare belongs in the settlement conversation. Read health insurance and benefits after separation.

Estate planning

Separation doesn't automatically change a will in many places, and divorce revokes only the gifts to the ex in many others. Ontario, since 2022, treats a separated spouse as having died first for will purposes once certain conditions are met, but rules vary and you shouldn't rely on them. Beneficiary designations on RRSPs, RRIFs, pensions, life insurance, TFSAs, 401(k)s and IRAs are separate from the will and often forgotten. Powers of attorney naming the ex stay in force until you change them. Do this early; see why your will needs updating first.

Adult children and inheritance

Adult children are not parties to the separation, but they are affected by it, and they often have opinions about the house, the money and any new partner. They may also be grieving the family home they grew up in. Three practical points. Keep them out of the negotiation. Tell them yourselves, together if possible, rather than letting them hear it from someone else. And if you intend to leave assets to them, say so in a new will rather than trying to build it into the separation agreement, which is between the two of you.

Looking after yourself

Later-life separation can be lonely in a specific way: friends are couples, routines were shared, and the person who knew your history is gone from the house. Some people also find themselves managing things for the first time, from investments to the car insurance. Put effort into your health and your friendships, and get help with the tasks you didn't used to do. If low mood or worry is getting worse, talk to your doctor or a therapist. If you are in crisis, call or text 988 any time in Canada or the US, or call 911 in an emergency. Our wellbeing guide has practical starting points.

Running the numbers

A late-life separation deserves a retirement projection for each of you: income from pensions, government benefits and investments, against housing and living costs, over a realistic lifespan. A fee-only financial planner or a Certified Divorce Financial Analyst can build this. It turns "is this fair" into "will I be okay," which is the question that matters most. The worked example of a grey divorce with a pension in payment shows how the pieces fit together.

What to gather

• Pension statements and plan documents for both of you
• CPP Statement of Contributions or Social Security statements
• RRSP, RRIF, TFSA, 401(k), IRA and investment statements
• Benefits booklets and retiree plan details
• Wills, powers of attorney and beneficiary designations
• Recent tax returns for both of you
• A realistic budget for living alone

What to do this week

1. Request your pension and government benefit statements; these can take time to arrive.
2. Find out when health and dental coverage ends for the spouse who is not the plan member.
3. List every account and asset you know of, including those in your spouse's name.
4. Book a meeting with a family lawyer, and consider a divorce financial specialist to model both households.
5. Review your will, powers of attorney and beneficiaries and make an appointment to update them.

Common questions

Will I get spousal support for life after a long marriage?

After a long marriage, support with no fixed end date is common in Canada and in many US states. Indefinite does not mean it can never change; retirement or a significant change in circumstances can lead to a review or variation.

Can I keep my whole pension?

Usually only if your spouse receives equivalent value from other assets. Pension value earned during the marriage is generally shared.

Should we do a legal separation instead of divorce to keep health benefits?

In the US some couples consider this, but legal separation is itself a COBRA qualifying event, so many employer plans end a spouse's coverage on legal separation as well as divorce. Check the plan's rules first, and get advice on the tax, estate and remarriage consequences in your state.

Can I claim Social Security on my ex-spouse's record?

Possibly. A former spouse who was married for at least ten years, is unmarried, and is generally at least 62 may be eligible. Check with the Social Security Administration.

This guide is legal information, not legal advice, and it is written for a general audience across Canada and the United States. Family law is provincial and state-based and changes over time. Before you rely on anything here for your own situation, confirm it with a qualified family lawyer in your province or state. FairWell can connect you with one through the professional directory. How we write and check our guides.