Will I be better off financially after divorce?

To put it simply, regardless of your financial position during a marriage, you'll likely have less money coming into your household after a divorce , and you may not be able to afford all the things you used to when you were married.

How long does it take to recover financially from a divorce?

- While emotional stress may feel harder to handle, recovering financially takes longer — and more than one-third have yet to fully do so up to five years following the divorce.

Who fares better after divorce?

Ultimately, the overall economic quality of a man's life, based on earnings and amount spent on living expenses, increases after his divorce. He continues to earn more but bears fewer family expenses. The overall economic quality of a woman's life, post-divorce, decreases.

Who loses the most in a divorce?

Though men can feel financially stressed after the divorce because they may have to pay alimony, child support, move out to another home, and generally spend more every month, many studies suggest that the economic impact of divorce adversely impacts women more than men .

Who suffers most in divorce financially?

Despite their best efforts to arrive at an equitable agreement, financial disparities between spouses after divorce are a reality for some couples. There is a good body of research on the subject that shows women bear the heaviest financial burden when a couple divorces.

What is the #1 cause of divorce?

Lack of commitment is the most common reason given by divorcing couples according to a recent national survey. Here are the reasons given and their percentages: Lack of commitment 73% Argue too much 56%

What is financial dissociation after divorce?

Financial dissociation Close all shared accounts or convert them into individual accounts where necessary . In the case of divorce you need to sort out the division of assets beforehand. A divorce mediator can help with splitting up assets fairly and out of court.

What is a financial disaster after divorce?

Many couples face financial uncertainty after they divorce. This is often the result of using the same income to pay expenses to operate two households instead of one . For instance, you're now faced with two mortgage or rent payments; utilities, furniture, appliances, and supplies for two homes… The expenses add up.

How financially damaging is divorce?

Louis, found that men – at least recently – have sustained higher average income losses after divorce than women . In 2022, women saw their income fall by 9% following a divorce, while men experienced a 17% decrease.

Post-Divorce Financial Planning: Reevaluating Investments (2024)

Navigating through a divorce can often feel like a turbulent, confusing, and uncertain storm. Amid the whirlwind of emotions, it's easy tooverlook a critical lifelinethat can guideyou towards calmer waters - financial stability. Financial stability, specifically taking control of your investments, can often anchor us in these challenging times. It empowers you to set a firm foundation for your new life, one whereyou can rebuild, grow, and flourish.

A firm financial foundation begins with redefining your financial goals to suit your new life. From there, we'll discuss understanding the implications of dividing assets, explore how changes in tax status can impact your financial plan, adjust your retirement strategy to reflect your new reality, and finally, update your insurance policies and estate plans to ensure they are in tune with your unique needs.

To bring all these points to life, we'll share Sarah's (name changed for privacy) journey - her challenges, her triumphs, and how she found confidence in managing her finances post-divorce with our help.

Why Revisiting Your Investmentsis an Important Aspect of Post-Divorce Financial Planning

1.New Financial Goals

While married, you and your partner probably had a joint vision for your financial future. Whether purchasing your dream home, preparing for your children's college tuition, or planning a vacation, these goals were crafted with shared dreams in mind. Post-divorce, however, your goals might have shifted. It's completely normal for your financial targets to change, and your investment strategy should evolve to reflect your new aspirations.

2. Dividing Marital Assets Can Throw Portfolios Out of Balance

Dividing marital assets, such as bank accounts, investments, and retirement savings during divorce, can lead to an imbalance in your investment portfolio. This shift may result in investments that no longer align with your post-divorce financial objectives or risk tolerance. Collaborating with a financial advisor to review and realign your portfolio can help ensure that your investments align with your evolving financial situation and future goals.

3.Differing Tolerance for Risk and Involvement with Investments

One often overlooked aspect of the post-divorce financialtransition is the recognition that you and your former spouse may not have shared the same tolerance for risk or the same level of interest in actively managing investments. During your marriage, you might have taken a more hands-off approach, trusting your spouse to handle financial matters, or perhaps you were the more financially engaged partner while your spouse took a more passive role.

Now, in the aftermath of divorce, these differences in financial attitudes and approaches can become pronounced. It's not uncommon for one spouse to discover a newfound interest in investment strategies or a willingness to take on more risk. At the same time, the other may prefer a more conservative or cautious approach. As a result, a new investment strategy may need to be employed.

4.New Tax Status

Another side-effect of divorce is the potential change in your tax bracket. Being a single taxpayer might affect how your investments are taxed, and adjusting your strategy to factor in these tax implications is important. This could mean prioritizing tax-efficient investments or rethinking tax-advantaged options to maximize your return.

5. Retirement Strategy May Need to Be Revised

Regarding retirement savings, a divorce could significantly impact your nest egg. Perhaps your shared retirement accountswere divided, leaving you with less than you had planned. This change might require you to increase your contributions or change the allocation of your investments to meet your new retirement objectives. A financial advisor can assist you in creating a post-divorce financial plan to reach your retirement goals.

6. Insurance Policies and Your Estate Plan Need to be Updated

Divorce necessitates a thorough review of all your documents, including insurance policies and other estate planning documents. It's essential to check the beneficiaries listed on these policies and make changes as needed. (It's common for your former spouse to be listed as the primary beneficiary if you haven't changed it.) You might also need to adjust coverage amounts to reflect your new life circ*mstances. Consult with an estate planning attorney to determine how best to update the necessary documents.

Finding Financial Confidence: Sarah's Post-Divorce Journey

Our client, Sarah, shared how our post-divorce financial planning work together has given her greater clarity, making financial decisions easier,

"My husband had a lot of different accounts. He would open new accounts all the time, and I never knew where anything was. With Leah's help, I've been consolidating everything into one place. It's just simpler for me to understand. She's great about leading me through things and has helped me do transactions, and each time, it gets a little less scary."

Sarah's story underscores the value of engaging a financial advisor who understands the complexities of financial planning after a divorce. They can provide empathetic, personalized advice based on your unique circ*mstances.

Creating a New Investment Strategy that Suits You

Now that you know why it's so important to revisit your investment portfolio,let's discuss how to createa new investment strategy that aligns with your post-divorce financial situation. Begin by clearly identifying your goals, whether saving for your children's education, building a retirement nest egg, or simply achieving financial stability. Next, evaluate your risk tolerance, understanding your comfort level with potential fluctuations in your investments. Simultaneously, assess your capacity for risk, considering your financial situation, income, and expenses.

Based on these factors, determine a suitable investment strategy that balances your goals and risk profile, which could involve diversifying your portfolio or opting for more conservative investments. Regularly review and adjust your strategy as needed to adapt to changes in your financial circ*mstances or market conditions, ensuring that your investments continue to align with your evolving post-divorce goals.

We Can Help

At our sister company, Intentional Wealth Partners, our compassionate team is prepared to help you navigate your post-divorce financial planning needswherever you are in the U.S. We invite you to learn more about the firm at www.greatlakesinvestment.com. While you're there, schedule a no-pressure chat to explore how we can support you as you start this new chapter.

Remember, it's okay for your financial plan to change as your life evolves. As you step into this new chapter, know that a secure financial future is absolutely achievable.