While it may not always feel like it, your divorce is more than just an ending. It can be the beginning of an exciting new chapter in your life. In the months and years after divorce, a myriad of new options will unfold. And the best part is — you’re in charge now. Whatever your goals may be, your life is uniquely your own, and you’re in the driver’s seat. Here are some tips to help.
1. Map your financial future.
As you approach the end of your divorce, it is likely you will have weathered the largest single financial and legal transaction of your life. No matter how well you do financially in the divorce, it can be scary. Often the six- and seven-figure lump sums that are obtained from a pension rollover or retirement plan or the sale of a house are one-time, non-replaceable assets. This is serious money and it must be carefully invested based your new circumstances. Making the right decisions for this one-time windfall can go a long way toward making sure you have a comfortable retirement, provide for your kids’ college education and even leave a legacy for your grandchildren.
2. Find the right direction.Suddenly being on your own to deal with such issues as money, children, and career changes, and the need to make decisions on the family home can feel overwhelming. Peace of mind comes from having a course of action for the days ahead and a strong support team to guide you. Be sure to choose a financial planning professional who specializes in navigating the divorce process.
3. Build your recovery team.There is a burgeoning field of financial advisors who specialize in providing advice on the financial questions people face during and after divorce. One designation for such a specialist, the one I have received, is the Certified Divorce Financial Analyst (CDFA) accreditation. It is not the only certification for the specialty so you may find advisors with other certifications as well. Your divorce recovery team should also include a qualified accountant and estate-planning attorney. You may even want a therapist, career counselor, or QDRO specialist (for pension or retirement account divisions) on board. Working with the right people will contribute greatly to restoring your feelings of well-being and self-confidence.
4. Ask the right questions.
How much will it cost you to live post-divorce and how will you generate income? How much spousal support will you receive and for how long? What is the most efficient way to split retirement accounts and take receipt of the money? How might a business or medical practice be offset? Would you benefit from a lump sum payment rather than monthly spousal support? What should you do with the house? Most important of all, what should you do to manage your settlement post-divorce?
Your financial team can help you identify your unique needs and goals going forward. But it’s not only about the facts and numbers. It’s equally important to integrate the softer, subjective issues you face. The process of moving forward is as important as the final terms of the divorce decree. Really great financial planners are not simply strategists but also compassionate mentors and guides.
5. Begin to enjoy your new life.
Money is intertwined with every aspect of your life — your home, your children’s education, even the quality of your health care. As you enter the new road of life ahead, consider your options: set goals, take a class, plan a trip, or find a new job. Creating goals for yourself, learning new skills, and keeping busy will help you feel a sense of purpose and empowerment. That is not to say you won’t have low times. Everyone does. But the bad days will be fewer as the good ones become more frequent.
I know that divorce is one of the most emotionally difficult events you will ever experience. But believe it or not, over the years I have seen thousands of people who went through the divorce process and not only survived, but thrived. That is what I wish for you. Time to rebuild…and flourish!
Ginita Wall, CPA, CFP® is a Certified Divorce Financial Analyst and director of the Women’s Institute for Financial Education. She is author of eight books, including "The ABCs of Divorce for Women," and “150 Ways to Divorce Without Going Broke.”
