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Laurie Itkin
October 6, 2022

Three Financial Mistakes to Avoid When Divorcing Over 50

Divorce is all about negotiation.

Divorce attorneys and mediators are typically not trained to use financial planning software to forecast the long-term financial impacts of various settlement options.

Divorce is never easy,  but divorcing over the age of 50 brings financial challenges that younger women don’t necessarily face.

Women at our age may be in a second marriage; we may have  acquired separate property before the marriage, whether it be real estate or retirement accounts. It's likely at this point that not everything we own should be deemed marital property to be divided in half.

Other possibilities to consider: women in this age group might have been stay-at-home moms for more than two decades so spousal support (sometimes called “alimony” or “maintenance” depending on the state) can become a key issue for negotiation. When a woman is over 50 there’s generally not enough time left to super-charge a dormant career and rebuild financially before old age forces us  into retirement.

Nearly every woman divorcing over 50 who has grown accustomed to a comfortable lifestyle fears she will not be able to maintain it, as income that supported one household must now support two.

After practicing as a CDFA® professional for seven years and advising one or both parties in over 350 divorce cases, I’ve become an expert in “gray divorce.” Friends are constantly surprised when I tell them that most of my clients are in their late 50’s to early 70’s. They assume that if divorce were to happen, it would be when or before the last child graduated from high school. It’s  surprising to many that older people aren’t just “sticking it out” in an unsatisfying relationship until they die. 

The reality is that the need for love, companionship and respect doesn’t go away when people are old enough for AARP membership, and people can (and I think should!) make significant life changes until the bitter end.

I’ve heard all the reasons for divorce: multiple affairs, porn addiction, substance abuse, covert narcissism, changing genders, financial abuse, and domestic violence. But often the reason is simply that partners have grown apart;  intense loneliness and a hunger for new connection and intimacy.

The type of work I do can  be emotionally draining and exhausting, especially if my clients end up in court. Years ago I made the business decision to focus my practice on couples in mediation or those working with settlement-oriented lawyers, primarily in California.  I love what I do because I advise men and women in both heterosexual and same-sex marriages on how to avoid financial mistakes that could be devastating for their financial future. I feel excited when I teach people who are going through the largest financial transaction of their lives how to become informed, financially literate, and in-control of their destiny.


These are the three biggest financial mistakes I see women over 50 make when they are negotiating a divorce settlement:

1. Choosing to be House Rich but Cash Poor

I get it. People are emotionally attached to their homes, especially if they have children who grew up in that house. But if the house is the largest or second-largest asset in the marital estate, what other assets (such as a retirement account or pension) is a woman willing to give up in order to stay therein the house? And if she has no liquid assets or income stream to pay her bills, she’ll have a beautiful home but no cash on which to live.  In many cases, selling the house and renting might be a better option.

However, my policy is that if a client wants to stay in the house, it is my duty to explore every possible way to do so, and the associated pros and cons. In this 10-minute video, I discuss the process I use with clients who want to keep the house in a divorce.

2. Negotiating Based on Pre-Tax Values Instead of After-Tax Values

When one spouse says, “I’ll keep x and you keep y and z…after all, they are worth about the same,” the other spouse could get hoodwinked. While the values may look about the same on paper, the value of one dollar of house equity is not the same as the value of one dollar in a traditional 401k or one dollar in Amazon stock that was purchased five years ago.

Pre-tax and after-tax values are often significantly different. A woman could choose to keep $100,000 in Amazon stock while her spouse keeps $90,000 in the savings account and learning later that she ended up holding the short end of the stick after having to pay capital gains tax.  I’ll never forget the time a husband suggested he keep the Roth IRA while his wife keep the 401k. He would never have to pay income taxes on the money he withdrew in retirement while she would. Thank goodness she hired me to review his settlement proposal!

3. Failing to Analyze Which Settlement Option Has the Highest Probability of Long-Term Financial Security

Divorce is all about negotiation. The vast majority of cases are settled out of court. While most states have guidelines (some of which are black and white, while many are gray) on how marital property is to be divided and how child and spousal support may be treated, much of the settlement will depend on how the parties negotiate and compromise.

These are some of the questions clients and I explore together:

  • Is a discounted lump-sum payment less risky than counting on monthly spousal support payments that may or may not fully materialize?
  • Is it wise to split the marital portion of a pension 50/50 or have one spouse keep the pension and the other keeps the house?
  • Is it better to keep the rental property even if it means the income may be counted against the spouse keeping the property in child support and alimony calculations?
  • Is it worth the cost to get a business valuation and how would a business be divided?

Divorce attorneys and mediators are typically not trained to use financial planning software to forecast the long-term financial impacts of various settlement options. When I work with a client, what she really wants to know is if she is at risk of running out of money in her later years. In a survey conducted in 2018, 42% of women believed they would run out of money by age 80. Since divorce is often the largest financial transaction of one’s life, it is prudent to work with a certified divorce financial analyst or divorce financial planner during this important time.

It's no secret that divorce can be financially devastating, but with proper planning and education, it doesn’t have to be that way.


Laurie Itkin is a certified divorce financial analyst, wealth manager, and author of the Amazon best-seller, Every Woman Should Know Her Options: Invest Your Way to Financial Empowerment. She serves on the Board of Directors of the Association of Divorce Financial Planners and volunteers as a pro-bono financial advisor for Savvy Ladies. Laurie enjoys playing squash and pickleball and practicing and performing improv comedy. She can be reached through her website,

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