Financial Planning After 65-Gray Divorce

August 15, 2025

Helping Clients Navigate the Impact of Gray Divorce

Gray divorce often occurs just as individuals are transitioning to or are already in retirement—when income is typically fixed, assets are intended to last a lifetime, and there's little time to rebuild wealth. Unlike younger couples, older adults can’t rely on decades of future earnings to recover. That makes proactive, strategic financial guidance all the more vital.

Let’s consider a real-world scenario that illustrates how thoughtful planning can protect both parties.


Client Case Study: Using a Reverse for Purchase to Equalize Assets


Client Profile & Situation:
A couple in their late 60s decided to pursue an amicable divorce. Their financial picture included:

  • Primary residence value: $1.7M
  • Existing mortgage: $500K
  • Net home equity: $1.2M
  • Joint investment assets: $1.5M

Both individuals wanted to downsize and relocate to a more manageable home. Before the divorce, they had explored purchasing a 1,200 sq. ft. two-bedroom townhome in a community where the HOA covers exterior maintenance, including roofing, painting, and common areas. Homeowners are responsible only for the interior.


Action Taken:
The couple sold their existing home and each walked away with approximately $550K in proceeds. They decided to purchase separate townhomes in the same community (but not on the same street) and used a Reverse Mortgage for Purchase (H4P) to finance their new homes.


Purchase Details (Each Individual):

  • Home Price: $900,000
  • Down Payment: $450,000
  • Monthly Mortgage Payment: $0
  • Ongoing Obligations: Property taxes, homeowner’s insurance, HOA dues, and maintaining the home to FHA standards.
  • Loan Type: Non-recourse reverse mortgage
  • Interest Rate: 6.3% (accrued to loan balance)
  • Refinancing: Option available

Outcome:

  • Both individuals secured long-term housing with no monthly mortgage payments.
  • The remaining investment assets were divided fairly, preserving retirement accounts.
  • Each person gained independence, financial stability, and housing security without incurring new debt.



The Financial Fallout of Divorce After 65

Divorce is no longer just a midlife event. Increasingly, it’s affecting older Americans—and creating new financial challenges for their advisors. According to national data, more than one in four people divorcing today are 65 or older. Baby Boomers, who were part of the first wave of widespread divorce in the 1970s, are now experiencing what experts call the “gray divorce” revolution. Many are in second or third marriages—relationships statistically 2.5 times more likely to end in divorce after age 50.

For financial planners, this trend presents a crucial opportunity to support clients during a complex life transition that can drastically reshape their retirement strategy.


Turning a Crisis into an Opportunity

Divorce is emotionally and financially disruptive—especially later in life. But with your guidance, clients can transition to this new chapter with dignity, stability, and confidence. Whether it's using home equity to remain housed, protecting retirement income, or updating their estate plan, your holistic support is key to helping them rebuild and protect their financial future.



Could This Strategy Benefit Your Clients? Let’s Find Out!

Do any of your clients fit this scenario? Retirement in Reverse would be happy to provide a customized, hypothetical scenario to help you assess if this strategy could be a valuable solution. Let’s explore how we can make it work for your clients!



Retirement In Reverse offers Objective, Competent Advice to help you make informative decisions for your clients.

Furthermore, we have No Conflict of Interest, as we do not sell Financial Product, nor enter into financial planning engagements. We share your commitment to your clients’ financial stability and quality of life.

Gray Divorce: How to Start Over Without Starting from Scratch

By Stan Lieberman • August 15, 2025
Divorce later in life—often called “gray divorce”—can feel overwhelming. You’ve spent years building a life together, only to find yourselves making a major transition right when you expected to settle into retirement. The truth is, divorce after 60 comes with its own set of challenges. You may be on a fixed income. Your assets need to last the rest of your life. And unlike younger couples, you don’t have decades ahead to rebuild wealth. But there is good news. With the right planning, it’s possible to move forward with dignity, financial security, and a sense of independence. Let’s take a look at how one couple did just that. Real Client Story: Using a Reverse Mortgage for Purchase to Start Fresh The Situation: A couple in their late 60s made the difficult—but mutual—decision to divorce. They were respectful, collaborative, and ready to begin new chapters of their lives. Here’s what their financial picture looked like: Home value: $1.7 million Existing mortgage: $500,000 Net home equity: $1.2 million Joint investment assets: $1.5 million They both wanted to downsize into manageable homes, ideally in the same quiet, HOA-maintained community they had looked at before separating. Each unit was a 1,200 sq. ft. two-bedroom townhome, with HOA covering the roof, painting, and all exterior upkeep—perfect for this new stage of life. What They Did: They sold their shared home and each walked away with approximately $550,000 . Instead of paying cash or taking on new debt, each person purchased their own townhome using a Reverse Mortgage for Purchase (also called H4P). Here’s how the numbers worked (per person): Purchase Price: $900,000 Down Payment: $450,000 Monthly Mortgage Payment: $0 Ongoing Costs: Property taxes, homeowners insurance, HOA dues, and regular home maintenance (FHA standards apply) Loan Type: Non-recourse reverse mortgage (you or your heirs never owe more than the home is worth) Interest Rate: 6.3% (interest accrues and is paid when the home is sold or refinanced) Refinancing: Allowed The Outcome: Both individuals secured long-term housing without monthly mortgage payments They didn’t need to touch their retirement investments to buy They maintained financial independence and peace of mind Assets were divided fairly, without stress or rushing to liquidate funds If You’re Facing a Divorce After 60—You’re Not Alone Did you know that more than 1 in 4 people getting divorced today are over age 65? Many of us are entering second or third marriages later in life—and these are statistically more likely to end in divorce after 50. It’s not unusual, and it’s nothing to be ashamed of. But it is something to plan carefully for. What You Can Do Next A later-in-life divorce may feel like the end of something, but with the right support, it can also be a new beginning . Whether you’re: Exploring housing options that don’t require taking on new debt Consult with your Financial Advisor first Trying to avoid cashing out retirement accounts Seeking ways to stay close to loved ones while maintaining independence Wondering how to afford two separate households on a fixed income …you’re not alone. There are tools, strategies, and people who can help. If you’re considering divorce or already in the process and need help making smart housing or financial decisions, reach out. We specialize in helping older adults navigate these life transitions with confidence. Author: Kinga Wulczynska-Lauer Disclaimer: Retirement In Reverse is a mortgage company dedicated to serving older adults, financial planners, and wealth managers with a strong focus on education and informed decision-making. While we strive to provide helpful information on a variety of topics, we are not experts in all areas. That’s why we collaborate with a trusted network of professionals—including attorneys, tax advisors, and financial planners—to help connect you with the right expert based on your individual needs. The information provided in this article is for educational and illustrative purposes only. Before making any financial, legal, or lifestyle changes, we strongly recommend consulting with a qualified professional who can review your personal situation. If you are considering Reverse Mortgage, call Ted Lange at 760-753-1568 to learn more.

Optimizing Social Security Benefits: How Home Equity Can Help You Retire on Time

July 15, 2025
As a financial advisor, guiding your clients through the complexities of Social Security is key to securing their retirement. One of the most important decisions retirees face is when to start claiming their Social Security benefits. Although benefits can be claimed as early as age 62, delaying this decision often results in significantly higher monthly payments. However, this decision is not always straightforward, and factors such as health, employment status, and marital situation can all play a role in determining the optimal timing. Understanding the tax implications and exploring alternative income strategies, such as leveraging home equity, can help you provide valuable insights to your clients. Social Security benefits are taxable , and the amount owed depends on total income. Given the market conditions today, many retirees are considering ways to maximize their Social Security payouts while minimizing taxable income. Key Considerations for Claiming Social Security Will your client continue working? Claiming Social Security before full retirement age while working can result in reduced benefits. Are they married? Spousal benefits can be crucial in optimizing household income. What is their health status? Life expectancy is a key factor in deciding whether delaying benefits makes sense. Delaying Social Security benefits generally leads to higher lifetime payouts. However, waiting can create income gaps in the interim. For clients who want to postpone Social Security while maintaining financial flexibility, home equity can serve as an effective solution. Leveraging Home Equity for Retirement One strategy to help clients delay Social Security benefits is by utilizing home equity. With a reverse mortgage, clients can access their home equity to supplement retirement cash flow. Since reverse mortgage proceeds are not considered taxable income, they can provide a tax-efficient way to bridge the gap, allowing Social Security benefits to grow. Case Study: Steve and Alice Clients: Steve (66), Alice (63) Home Value: $1,150,000 | Mortgage: $0 Steve plans to retire at 70, and Alice will retire at 67. Both are in good health. Assets: Steve: IRA $125,000 | 401(k) $456,000 Alice: CalPERS pension $3,745/month | Retirement annuity $174,000 Joint investment accounts: $850,000 Monthly Expenses: Utilities: $350 Property Taxes: $635 HOA: $180 Car Insurance: $187 Food and Entertainment: $3,000 Total: $4,165/month Steve and Alice plan to defer Social Security, CalPERS, and 401(k) distributions until age 71. To help bridge the gap, they applied for a reverse mortgage that offers a $371,000 line of credit. The unused balance will grow annually at 6.25%. By age 71, Steve and Alice will have created a "perfect hedge" with an irrevocable line of credit that remains available for as long as they live in the home. With no required principal or interest payments, this strategy allows them to delay Social Security without sacrificing financial security. As a financial advisor, helping clients optimize their Social Security benefits while preserving their home equity can significantly enhance their retirement strategy. Although using home equity is not the right solution for everyone, for those looking to maximize their Social Security payouts and maintain steady income, it can be a powerful tool. By considering all available options, you can guide your clients to make informed, confident decisions that support their long-term financial goals. Could This Strategy Benefit Your Clients? Let’s Find Out! Do any of your clients fit this scenario? Retirement in Reverse would be happy to provide a customized, hypothetical scenario to help you assess if this strategy could be a valuable solution. Let’s explore how we can make it work for your clients! Retirement In Reverse offers Objective, Competent Advice to help you make informative decisions for your clients. Furthermore, we have No Conflict of Interest, as we do not sell Financial Product, nor enter into financial planning engagements. We share your commitment to your clients’ financial stability and quality of life.
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