This phenomenon, also known as “grey divorce”, is a growing trend and it’s changing the retirement market.

According to Statistics Canada, 21.6% of women and 18.9% of men in their late 50s were divorced or separated in 2011, up from 6.9% for women and 6.2% for men in 1981.1 As our aging population grows, so will these numbers — as will the financial challenges.

No matter when in life it occurs, divorce can be costly. But when it involves seniors with a limited retirement income, the financial effects often increase.

Essentially, divorce requires people to build a new life with reduced assets. In addition to dividing the family home, personal belongings and other effects, the pool of money intended to fund one couple’s retirement is split two ways. Unlike their younger counterparts, clients who divorce in their 50s, 60s and beyond have less time to rebuild those assets.

The conversations you have with your clients during this emotional time may not be easy ones. However, clients in this situation will appreciate sound financial advice, not just to make the most of their remaining assets but to recover their financial footing.

Delayed retirement – One option you can suggest is to put off retirement. Rather than retiring at age 65, for example, some clients could work a few more years — full-time, part-time or seasonal — to get back on track.

Cost cutting – Another strategy: spend less. Sit down with clients to review their expenses and determine what’s necessary and what’s not. A smaller home, more fuel-efficient vehicle, fewer vacations and greater awareness of where their money goes every month could mean substantial savings.

Legacy plans and gift giving – Leaving an inheritance or giving money to a good cause is admirable. So is paying for grandkids’ tuition or a family wedding. But when money’s tight, it’s not always practical.

Remind your clients that their retirement may last 30 years or more. During this time, they’ll need to cover basic and health-care expenses. Encourage them to rethink their legacy and gift-giving plans in favour of covering these needs.

Money matters – If one spouse handled most of the finances during the marriage, the other spouse may need guidance about budgeting, savings and investments, life and health insurance, retirement income options, etc. Ask clients if they need help with basic money matters. Offer your support and encourage them to learn more through books, the Internet and other resources. Clients may also have questions regarding pension money, particularly if one spouse has earned a larger amount. Pension division is very complicated; encourage clients to seek legal advice before making any decisions.

By helping your clients navigate the complicated waters of a late-in-life divorce, you can continue to support their retirement goals.

To learn more about helping clients plan for their needs and manage their risks, visit

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1Anne Milan, “Marital Status: Overview, 2011”, Report on the Demographic Situation in Canada, July 9, 2013. Statistics Canada catalogue no. 91-209-X.