I'm a Financial Adviser: This Is Why a Second (Gray) Divorce Could Cost You Big-Time

Divorce isn't any easier the second time around, especially for those who've remarried later in life. But rushing a settlement without the proper advice can have serious consequences.

By Chris Hernandez

published 11 February 2026

in Features

An older couple sit on a sofa together with their backs to each other, clearly not happy.

Few couples relish the idea of getting divorced — especially as they're nearing retirement.

However, divorce rates among older Americans is a growing trend. Between 1990 and 2022, the number of Americans at least 65 years of age who were divorced increased from 5.2% to 15.2%.

Regardless of age, getting divorced can bring major financial changes. But for those who are nearing retirement, the impacts can feel amplified — especially if proper guidance and planning are lacking.

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As a financial adviser, I've worked with a lot of clients who have gone through divorces later in life. In many cases, it's not happening to couples who have been married for decades.

Instead, it's happening to folks who were previously widowed, met someone else, jumped into a marriage too fast and have realized it's not what they wanted.

Typically, these individuals feel a little regretful about deciding to remarry at this point in their lives and are embarrassed by the divorce. As a result, they don't reach out for help and mistakes are made.

About Adviser Intel

The author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

Dividing retirement accounts

One of the biggest oversights deals with the separation of retirement accounts.

Instead of filing for a qualified domestic relations order (QDRO), which is a court order that essentially allows a portion of an employer-sponsored retirement account to be paid to an "alternate payee" such as an ex-spouse or dependent, individuals choose to distribute money from the accounts themselves.

This can trigger tax penalties, such as the income-related monthly adjustment amount (IRMAA).

Financing an ex without meaning to

Another financial issue many older Americans run into when getting a divorce later in life is not updating their long-term financial plans. This includes updating estate plans and beneficiary designations and even reviewing Social Security benefits.

Getting divorced later in life can change how you qualify for Social Security. If the marriage lasted at least 10 years, you're at least 62 and you're not remarried, your ex-spouse is eligible for benefits — and your own benefit is lower than the divorced-spouse benefit.

If all conditions are met, ex-spouses can receive up to 50% of their ex-partner's full retirement benefit.

If you have life insurance, joint long-term care policies or receive Medicare coverage, you'll also want to review these policies to make the necessary changes.

Otherwise, you may be funding coverage for an ex without even realizing it.

Reach out for help

No matter the age, divorces are tough on everyone involved. Whether it's splitting up assets, making changes to your estate plan, navigating Social Security or Medicare changes or reassessing your expected retirement age, the biggest mistake you can make is not reaching out for help.

When you're getting divorced, schedule a meeting with a tax, investment, and legal professional. While this may seem like an added expense now, it could save you from making costly mistakes that could impact your long-term financial goals.

Investment Advisory Services are provided by Waterloo Capital d/b/a Strategic Capital, an SEC Registered Investment Adviser. Registration with the SEC does not imply a certain level of skill or expertise. Strategic Capital is not affiliated with Waterloo Capital. Additional information about Waterloo Capital d/b/a Strategic Capital, is available in its current disclosure documents, Form ADV Part 1A, Form ADV Part 2A Brochure, and Client Relationship Summary, which are accessible online via the SEC's investment Adviser Public Disclosure (IAPD) database at www.adviserinfo.sec.gov. Waterloo Capital does not offer or provide legal or tax advice. Please consult your attorney and/or tax advisor for such services.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Chris Hernandez began his career in financial services in 2008. He is the managing partner and co-founder of Strategic Capital in Austin, Texas, a fast-growing fiduciary wealth management firm that serves high-net-worth families, professionals and business owners. Under his leadership, Strategic Capital has earned more than 100 five-star Google reviews and is recognized for combining comprehensive planning with a highly personal client experience. In 2012, he qualified for the Million Dollar Round Table and has done so every year since, reflecting a commitment to excellence and industry leadership.