Divorce is never easy — emotionally, mentally, or financially. But for a growing number of older Americans, splitting up later in life is creating an entirely new kind of challenge: rebuilding retirement plans that were never designed for life apart. According to the latest Annual Retirement Study from Allianz Life, “gray divorce” — the term used for separations involving people aged 65 and older — is on the rise, and it’s posing serious financial risks that many are unprepared for.

While the national divorce rate has been trending downward overall, divorces among older adults are sharply increasing. Allianz’s report, released in July 2025, highlights how changing demographics and evolving social norms are fueling this trend. Drawing from national data, including a 2022 Journals of Gerontology study, the report notes that 36% of divorces in the U.S. now involve individuals over the age of 50, and that those aged 65 and older are divorcing at a higher rate than any other age group.

The financial implications of a late-life split are profound. More than half of respondents (56%) in the Allianz survey said that divorce would significantly disrupt their retirement plans. The concern spans generations: 63% of Millennials, 52% of Gen Xers, and 35% of Baby Boomers reported anxiety over how divorce might derail their financial security in retirement.

The reality is that many who experience divorce later in life face unexpected challenges. Among those who had already gone through a divorce, 40% said the process interfered with their retirement planning, and 54% said they were left with substantially greater financial responsibilities post-divorce. In addition, 41% said they felt more financial stress following the separation.

“Those going through gray divorce don’t have the time to rebuild retirement savings on their own,” said Kelly LaVigne, Vice President of Consumer Insights at Allianz Life. “Trying to fund two separate lives instead of a joint one can deplete retirement accounts faster than anticipated. Many may need to delay retirement or consider additional risk management strategies to ensure their funds last.”

The financial strain of gray divorce often extends beyond immediate cost-sharing adjustments. Many couples have planned for retirement as a unit — with shared housing, pooled investments, and mutual long-term goals. When that unit splits, the costs double, but the income often does not. Medical expenses, long-term care plans, and Social Security strategies may all need to be reevaluated.

Yet the experience of divorce is also prompting reflection. 44% of divorced respondents said the event caused them to think more carefully about retirement, and some are now advocating for planning tools that address potential future separations. Thirty-five percent of all respondents said they worry about not having a financial plan in place if they were to divorce, with younger generations especially attuned to the risk — nearly half (47%) of Millennials voiced that concern.

Despite the discomfort surrounding the topic, financial professionals say preparing for the possibility of divorce — even later in life — is becoming essential. Strategies such as maintaining some financial independence, having clear legal documentation, and working with a financial advisor or estate planner are increasingly recommended for couples nearing or entering retirement.

The Allianz study surveyed 1,000 adults aged 25 and older with household incomes of at least $50,000 for individuals, $75,000 for couples, or with investable assets of $150,000 or more. It paints a clear picture: the growing wave of gray divorce is not just a social trend — it’s a financial wake-up call. For Americans of all ages, especially those approaching retirement, the message is clear: hope for the best, but plan for every possibility.

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