Gray Divorces are on the Rise, but Reverse Mortgages are Changing How Women Can Cope

Unhappy Senior Couple

In an article entitled  Gray divorce boosts poverty level for women, financial Author Mary Beth Franklin shared powerfully about this growing phenomenon and how women are particularly impacted by it. Here are a few quotes

  • Divorce among spouses age 50 and older is increasingly common and has negative implications for baby boomers’ retirement security
  • Even though the overall U.S. divorce rate has remained stable since 1990, gray divorce has doubled during that period
  • “The share of baby boomers living in poverty is nearly five times higher among unmarried (19%) than marrieds (4%)
  • Gray divorce appears to diminish wealth more than earlier divorce, the report noted
  • In addition, gender matters and economic disparity between men and women widens with age. A whopping 27% of gray divorced women are poor compared to just 11% of gray divorced men. Women are impacted in a greater measure than men are.

This week I had a question about an older divorcing couple. As noted in the article, this types of divorces were rare in times past, but this is no longer the case. And more is predicted with the advent of the baby boomers. The bad news is that divorce is always painful, but if there is a home involved, there may some ways to create a real win/win.  Especially for women.
Below is an example of how a bad situation was made better by the presence of a Reverse Mortgage.


Betty and John Simkins (ages 70 and 71) never imagined their marriage would fail. After 45 years together they found themselves in a category called “gray divorce.” They have three grown children with a number of grandchildren who all live nearby. Their home of 40 years has appreciated to around $450,000. They have a small home equity line of credit balance of $50k.

The divorce decree has stipulated that any remaining equity of the house is to be divided equally.

Betty wants to remain in the home and John wants move out and get on with his new life and girlfriend. What can be done?

Three Options:

Option 1: Sell the Home for $450,000, pay off HELOC balance and have $400,000 remaining. Divide those proceeds and Betty and John each gets $200,000 to go and start over.  Perhaps in a rental situation or a smaller home or a larger home with a small monthly mortgage payment.

Option 2: Betty gets a Reverse Mortgage on the existing home and pays off the husband’s $200,000. But will the Reverse Mortgage provide enough to do it. Click HERE to use the new advisor calculator and see if it does. Well, did it?  Yes, she paid off the existing mortgage and had $202,000 remaining in which she could buy her husband out. Now she can stay in the home without any mortgage payments required. {She is still responsible for maintaining the home and paying property related taxes and insurances}


Option 3: Betty moves and takes her $200,000 payout. But she wants to purchase a home for $300,000. However, she does not want to make a traditional mortgage with monthly mortgage payments nor does she does not want to pull $100,000 from her savings.  Her advisor told her she can use the HECM/Reverse for Purchase program to move into the $300,000 home and still have money left over. Can She?  How much will she have left over?

Yes, she can purchase her $300,000 home using the HECM for purchase, have no monthly mortgage payments and have $56,000 left over {$200,000 from settlement – $144,000 down payment}. This again is a fresh start with a financial benefit that is not perfect, but it is better than the alternatives.


Click HERE and go to the 2nd Calculator called HECM for Purchase and find out. You may be surprised.

Reverse Mortgage Calculator

Gray divorce is a reality, but thankfully 87% of retirees may have a viable settlement option by using the reverse mortgage.

Bookmark the calculator and use it often. It’s simple and a really good way to give your client a few options they may not have considered.

You can download the HECM for Purchase Buyers guide HERE

H4P Buyers Guide Lite

Don Graves, RICP® | President – Chief Conversation Starter
HECM Advisors Group |The HECM Institute
Changing the Conversation about Reverse Mortgages
25 Washington Lane, 10A | Wyncote PA, 19095
Direct (215) 732-0814  | Mobile: (484) 442-0732
Toll-free/E-fax  (800) 762-6315 |
Connect on LinkedIn  |Twitter @AskDonGraves  |YouTube/AskDonGraves
Don Graves was featured HERE on Recent PBS Special on Reverse Mortgages

Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®
Don Graves, RICP® is a Retirement Income Certified Professional and one of the Nation’s Leading Educators on the Emerging Role of Reverse Mortgages in Retirement Income Planning. He is president and founder of the HECM Institute for Housing Wealth Studies and an adjunct professor of Retirement Income at The American College of Financial Services. He has helped tens of thousands of Advisors as well as more than 3,000 personal clients since the year 2000
Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®
Don Graves, RICP®, CLTC®, Certified Senior Advisor, CSA®

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