Grey Divorce in Ontario: What Changes After 50

Grey divorce—splitting up after 50—is the fastest-growing divorce demographic in Canada. The divorce rate for people over 55 has roughly doubled since the 1990s.

And here's the thing: grey divorce plays by different rules. Not legally different, but practically different. When you're 35 and divorcing, you have decades to rebuild. When you're 58, the math changes completely.

This guide covers what's actually different about divorcing later in life, and the strategic decisions that matter most.

The Rule of 65: Why It Almost Always Applies

If you're over 50 and divorcing after a substantial marriage, the Rule of 65 probably applies to you.

Quick refresher: Add the recipient's age at separation plus years of marriage. If it equals 65 or more (and you were married at least 5 years), spousal support duration is indefinite.

For most grey divorces, "indefinite" support is the starting assumption. That doesn't mean forever—but it means no automatic end date. The payor will need to go back to court to reduce or terminate support when circumstances change (like retirement).

The Retirement Timing Strategy

This is the strategic decision that can change your financial picture by hundreds of thousands of dollars. And almost nobody talks about it openly.

The Core Question: Retire Before or After Separation?

Spousal support is based on income at the time of separation (and ongoing). If you're earning $150,000 when you separate, support is calculated on $150,000. If you retire next year and your income drops to $50,000 pension, you have to go back to court to get support reduced.

But if you retire before separation, your income is already $50,000 when support is calculated. That's the number that gets used.

When Early Retirement Makes Sense

If you were planning to retire anyway within the next few years, retiring before separation can be strategically sound:

• You avoid years of paying support based on working income
• You avoid the cost and uncertainty of going back to court
• Your ongoing financial obligations are clear from day one

The Risk: Courts Aren't Stupid

If you're 52 and suddenly retire right before filing for divorce, courts may view that skeptically. They can impute income—treat you as if you're still earning what you could be earning.

Factors that make early retirement look legitimate:

• You're at or near normal retirement age for your profession
• You have health issues affecting your ability to work
• Your employer offered an early retirement package
• You have a documented history of planning for early retirement

Factors that make early retirement look strategic:

• You're significantly younger than typical retirement age
• You have no health issues
• You retired immediately before or after separation discussions began
• You have skills that are still in demand

Pension Division: The Big Asset

For many grey divorces, the pension is worth more than the house. And pension division is complicated enough that people make expensive mistakes.

How Pensions Get Valued

Pensions are valued as of the date of separation and included in Net Family Property equalization. Only the portion earned during the marriage gets divided.

For defined benefit pensions (the traditional kind that pays a set amount monthly), you need an actuarial valuation. This calculates the present value of future pension payments. It's not cheap—expect to pay $500-$1,500 for a proper valuation—but it's essential.

For defined contribution pensions (like a group RRSP), the value is simply the account balance on the separation date.

Three Ways to Divide a Pension

Option 1: Immediate Offset

The pension stays with the pension holder. They compensate the other spouse with other assets (cash, house equity, investments) equal to their share of the pension value.

Good for: Clean break, no ongoing ties, pension holder keeps their full pension

Bad for: Requires other assets to trade. Also shifts risk—if pension holder dies early, they "lost" the trade

Option 2: Deferred Settlement

The pension is divided, but the non-pension spouse doesn't receive anything until the pension holder actually retires and starts receiving payments. Then they get their share of each payment.

Good for: Doesn't require other assets to offset. Non-pension spouse shares in the actual pension

Bad for: Ongoing financial tie. Non-pension spouse has to wait (and hope pension holder doesn't die first)

Option 3: If-and-When (for Defined Benefit Plans)

Similar to deferred settlement, but payments are made "if and when" the pension comes into pay. Some pension plans allow the non-member spouse to be paid directly by the plan.

The Double-Dipping Question

If a pension is divided as property, should the pension income also count for spousal support calculations?

Generally, courts try to avoid "double-dipping"—using the same asset twice. If the non-pension spouse already got credit for half the pension value in property division, the pension income shouldn't also boost their spousal support.

But this gets complicated in practice. Read more in our Property Division vs Spousal Support article.

CPP Credit Splitting: The Automatic Division

Canada Pension Plan credits get split differently than other assets—and many people don't realize it's automatic.

How CPP Splitting Works

When you divorce, Service Canada automatically divides the CPP credits you and your spouse earned during your time together. Each spouse gets half of the total credits earned by both during the marriage/cohabitation.

This happens automatically upon divorce unless you specifically opted out in your separation agreement (and the agreement was signed before 1988 rules, or you're in Quebec, or you have a specific opt-out clause that was allowed).

CPP Splitting Is Separate from Property Division

CPP credit splitting happens automatically through Service Canada. It's not part of your Net Family Property calculation. You don't negotiate it—it just happens when the divorce is finalized.

This means even if you agree to an "unequal" property division, CPP credits still get split 50/50 (unless you have a valid opt-out).

Can You Opt Out?

In limited circumstances. You need a written agreement that specifically says CPP credits won't be divided, and it has to meet certain criteria. Most separation agreements don't include valid opt-outs because the requirements are strict.

Talk to a lawyer if opting out matters to you—it's not as simple as adding a line to your agreement.

Health Benefits: The Hidden Crisis

Here's something that doesn't show up in any calculator: if you were covered under your spouse's employer health benefits, you lose that coverage when you divorce.

For younger people, this is annoying but manageable. For people over 50, it can be a serious financial and health issue.

Why This Matters More in Grey Divorce

• Pre-existing conditions: By 50+, many people have health conditions that make private insurance expensive or unavailable
• Higher premiums: Private health insurance costs increase significantly with age
• Coverage gaps: Ontario Health (OHIP) doesn't cover dental, vision, prescriptions, or many other costs that employer plans cover
• Fixed income concerns: If you're retiring soon, you're about to have less income just as you need to pay for your own coverage

What You Can Do

Negotiate benefits continuation: Some separation agreements include provisions requiring the employed spouse to maintain health coverage for the other spouse (if the plan allows it) or to pay the equivalent cost.

COBRA-style options: Some employer plans allow continued coverage for separated spouses for a limited time. Check with the plan administrator.

Factor it into support: The cost of replacing health coverage can be considered when negotiating spousal support. If you're losing $5,000/year in health coverage value, that's a real expense.

Group plans through associations: Professional associations, alumni groups, and other organizations sometimes offer group health plans that are more affordable than individual coverage.

The Limited Recovery Time Problem

When you're 35 and your retirement savings get cut in half, you have 30 years to rebuild. When you're 58, you have maybe 7 years—if you don't need to retire earlier.

What This Means Practically

For the higher earner:

• You may need to work longer than planned
• Your retirement lifestyle will likely be more modest than you expected
• Consider the trade-offs between lump-sum property settlements and ongoing support payments carefully

For the lower earner:

• You may need to re-enter the workforce even if you haven't worked in years
• Skills upgrading and retraining are worth considering
• Don't count on spousal support lasting forever—the payor will eventually retire, and support will likely decrease

The Retraining Question

Courts expect spousal support recipients to make reasonable efforts toward self-sufficiency. But what's "reasonable" at 55 after 25 years out of the workforce?

The bar is lower for grey divorce recipients:

• Age discrimination in hiring is real
• Skills may be genuinely outdated
• Health limitations are more common
• The time horizon for return on retraining investment is shorter

That said, doing nothing can hurt your case. Taking a course, doing volunteer work in your field, or making documented job search efforts—even if unsuccessful—demonstrates good faith.

Strategic Considerations for Grey Divorce

1. Get Proper Valuations

Grey divorce assets are complex. Pensions need actuarial valuations. Businesses need professional appraisals. Real estate needs current market assessments. Don't guess on big numbers.

2. Think About Liquidity

A pension worth $500,000 and a house worth $500,000 are both valuable—but you can't pay your grocery bill with pension credits. Consider how liquid different assets are when negotiating division.

3. Plan for Healthcare Costs

Budget for health insurance, out-of-pocket medical costs, and potential long-term care needs. These costs increase with age and often aren't factored into standard support calculations.

4. Consider the Tax Picture

Different assets have different tax implications. RRSP withdrawals are taxable. TFSA withdrawals aren't. Spousal support is taxable to the recipient and deductible for the payor. Structure your settlement with taxes in mind.

5. Document Everything

Health conditions, career sacrifices, financial contributions, retirement plans—document it all. In grey divorce, the history of the marriage often matters more than in younger divorces.

Try the Calculator

Want to see how spousal support might work in your situation? Our calculator handles the Rule of 65 and can show you what support might look like based on different income scenarios.

Remember: grey divorce is complex enough that you really should work with a lawyer and possibly a financial planner who understands divorce. The calculator gives you a starting point, but your situation probably has nuances that affect the outcome.

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Related Articles

• The Rule of 65 Explained — When support becomes indefinite
• Property Division vs Spousal Support — Understanding both calculations
• Strategic Moves Before Filing — Timing decisions that matter
• Tax Rules for Spousal Support — CRA implications

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