Told ya so

August 2010

Heads turned this spring when former Vice President Al Gore and his wife Tipper announced their separation after 40 years of marriage. Although many were shocked by the news, I’ve been predicting it for years.

No, I wasn’t predicting that the Gores would divorce per se. Rather, I wrote back in 1997 in The Truth About Money that our society is increasingly experiencing multiple marriages due to the fact that people are living longer than ever. In the book, I predicted that you might have four or five spouses during your lifetime and was only half joking when I said, “After all, can you imagine marrying someone at age 20 and living with that same person for the next 120 years!? Honey, I love you, but...”

Think about it: If you were age 20 in 1900 and married that year, you (or your spouse) were probably dead before you reached your 25th wedding anniversary — because life expectancy was only 47 years. But someone born in 1990 has a life expectancy of 83 years, according to the IRS. If that person marries this year, it’s highly likely he or she will be alive to celebrate a 50th wedding anniversary.

Assuming he or she wants to, that is. As the Gores have demonstrated, not everyone does. According to the Census Bureau, 3.5% of those who first married between 1955 and 1959 and reached their 35th anniversary didn’t make it to their 40th.

Of course, divorce always has serious implications for your personal finances. (It also has a huge impact on your family, emotions and life, but we’ll limit our conversation to money since this is a financial newsletter.) And divorce after 40 years has unique issues, because the people divorcing at that time are at or near retirement, and thus, far more dependent on current or soon-to-come pensions, Social Security and investment income. If divorce wasn’t in the plan — and when is it? — the couple may not have saved enough to support two households.

The Gores are unlikely to have that problem — a 2007 Fast Company estimate put Al’s net worth at more than $100 million. Of course, that’s not the case for the vast majority of Americans.

We’re not suggesting that you save extra cash “just in case” you experience divorce. Instead, it’s much cheaper (and emotionally rewarding, but hey, this is a financial newsletter so let’s not go there) for you to keep working on making your marriage strong. The job, children, relatives, health and stresses of everyday life can strain even the best of marriages, so make sure you dedicate time and energy (and, yes, money) to supporting, maintaining, developing and enhancing your relationship. Use your time with your financial planner to share your marital hopes and dreams for the future.

Although this newsletter and our financial planning practice is all about money, well, you know the real truth: It’s not about the money at all. Instead, it’s really all about the relationships. And you might be surprised how your financial advisor can help you and your spouse establish mutual goals and design a plan so you can reach those goals together.

After all, the way life expectancies are increasing, you may indeed be together for another 40 years. Let’s hope so, and let us help you make it happen, so you can avoid the pain and unhappiness that the Gores are experiencing.