How to Rebuild Your Savings and Retirement After a Divorce

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Women who have gone through a divorce often see their savings and retirement depleted. Building back means careful planning.

Twenty years ago, when I was pregnant with my daughter, a mom friend predicted my future: The baby will come and — from exhausted necessity — you and your husband will divide tasks, which will fall on either side of outdated gender lines. At the time, I smugly demurred, but eventually there was no denying she had been right. I was a freelance writer who took on the role of caring for our child and house; my husband, who had access to financial advisers and retirement funds through his university job, saw to our shared finances.

Our dual incomes didn’t exactly add up to wealth, so it made sense to pool our stretched assets — or so it seemed until we separated two years ago. I had a very small I.R.A. of my own. But since my husband’s university matched a percentage of his retirement savings, we had used more of my income to pay monthly expenses and more of his to invest in a 401(k) in his name, with the understanding that it would cover both of us when we stopped working.

Although this money would theoretically be equitably divided when divorce papers were signed, I realized the precarious situation I had unwittingly set myself up for: I’d relinquished control over my financial future. Facing reduced income and the extra expenses that come with divorce proceedings, wresting it back would be painful.

I’m hardly alone. Divorced Americans are more likely than those who never experienced divorce to lack enough savings to retire at 65 with their accustomed quality of life, according to a study by the Center for Retirement Research at Boston College. Mothers often take the brunt of the financial hit because of “both the expense of raising children and the negative consequences for their earnings of having child care and family responsibilities,” said Maria Cancian, dean of the McCourt School of Public Policy at Georgetown University. Women of color are also disproportionately affected because of a wider gender pay gap.

“A lot of my clients in their 30s and 40s feel like they are underneath the mark of where they should be in terms of having saved for retirement,” including those facing divorce, said Aja Evans, a New York financial therapist and licensed mental health counselor, who addresses the emotional factors around finances with her clientele of mostly Black women. “They have a lot of shame, a lot of guilt, about not having saved enough.”

Ms. Cancian said married couples can rely on each other — and their family health insurance plans — when one spouse experiences a layoff or health issue. “It’s harder to get by as single people because you lose economies of scale,” she said. That means you now need to pay for two places to live, two cars, two emergency funds and so on.

Crawling back up to “the top of the food chain,” in the words of Debra Kaplan, a licensed therapist based in Tucson, can take years. Ms. Kaplan needed 10 years to regain the standard of living she had before her divorce, slowly increasing her earning power and putting aside some money for incidentals, as well as retirement.

New York and 40 other states grant an equitable split of maritally accumulated assets and debt. But there are circumstances that can preclude access to them (including financial infidelity, where a spouse hides money) and a slew of ways to determine how they’re apportioned.

You might ask for less of your spouse’s 401(k) and Social Security benefit and more of your joint savings, to pay for health insurance after you’re knocked off your spouse’s plan. You might equally split the proceeds from the sale of the family house and ask for none of your spouse’s retirement money, believing your own to be ample. Lori Stevenson, a certified public accountant in Minneapolis who divorced two years ago after a 32-year marriage, took a smaller cut of her ex’s retirement savings (she had both a 401(k) and an I.R.A.) and agreed to pay her youngest son’s final two years of college tuition in exchange for keeping the house.

Divorce lawyers frequently broker deals like these. But the way they approach marital assets can be different from they way a financial planner would view things, said Kristina George, a wealth manager and partner at Northstar Financial Planning in Windham, N.H. Lawyers who don’t know the tax consequences of stock options or retaining a house, say, might “trade assets” in ways that are “not apples for apples,” Ms. George said.

Ms. George pointed out that one of the greatest upheavals from divorce is the way it changes how a person is taxed. Women filing as heads of households for the first time may get walloped, so it’s important to have a tax projection along with the divorce decree, Ms. George said.

Without expert guidance, either ex-spouse can land in financial hot water. Tales abound of people finding themselves priced out of gentrifying local housing markets after selling the family house, necessitating moves to other states to squeeze the most out of now-too-scant retirement savings.

After divorce, Ms. Stevenson shifted from part-time to full-time work; it’s a move that Karen D. Sparks, a certified divorce financial analyst in Santa Clara, Calif., said requires a career-training refresher for many older women, which she factors into post-divorce budgets. Eventually, though, Ms. Stevenson’s work hours were reduced and she is now in debt, on a constricted budget and unable to save.

Dawn Pick Benson, 50, is a copywriter and travel coach living in Grand Rapids, Mich. When she filed for divorce from her husband of 18 years in 2018, she had a lawyer ready to negotiate the division of a house, a sailboat, two cars, joint savings and checking accounts and individual savings and retirement accounts for each spouse — although Ms. Benson’s retirement fund was smaller. But she had no idea what division made long-term sense, or what kind of trouble she’d get into if her lawyer chose incorrectly. In a panic, she contacted Liza Caldwell, a co-founder of SAS for Women, an organization offering divorce coaching and other educational resources.

Ms. Caldwell recommended a certified divorce financial analyst, who told Ms. Benson to hold on to her house, since she could rent it when she traveled to help pay off the mortgage. This meant giving up the rest of the joint assets (save one car) and her ex-husband’s individual and retirement savings. She also paid him a small cash adjustment to ensure an even split of the value of all assets. But with no children and at least 15 years until retirement, Ms. Benson has time to build back. The experience helped her feel like “it’s not just me on my own, making my way,” she said.

Hiring a financial expert can strain budgets already sapped from paying divorce lawyers and mediators. Alison Borel, 49, a substitute teacher in San Diego, filed for divorce last August and feels like expert help is out of reach until she can save enough money. She’s also waiting to take advantage of myriad online financial support groups to educate herself better. Ms. Stevenson has attended a few divorce webinars organized by financial planners, most of them free. They’ve helped her draft detailed budgets that help keep her spending in line and plan for emergencies.

SAS for Women offers free events, including a seminar called “Preparing Your Financials for the Negotiation Table.” The last time it was posted, Ms. Caldwell said, 248 women signed up immediately. She also said Savvy Ladies, a financial literacy nonprofit that offers free financial education and advising, was a useful resource.

Ms. George sends people to a resource site hosted by the Women’s Institute for a Secure Retirement, a nonprofit. Books offer plenty of information, too; Ms. Evans, the financial therapist in New York, favors those by the “Budgetnista” Tiffany Aliche. Advice runs the gamut, from finding a certified divorce financial analyst to work with, figuring out a secondary income stream and going back to school to kick-start a more lucrative career path.

There’s also a proliferation of less-formal online communities. Suzy Nguyen, a divorced New York writer and a women’s financial literacy advocate, runs a monthly group called Women & Finance: Conversations into Action, in which members share their financial experiences and advice.

“I’m post-divorce and figuring out how to save enough for retirement,” Ms. Nguyen said. She said her financial adviser projected that she would run out of money by the time she turned 80, in part because of the high living costs in New York, where she lives. She’s planning to rent apartments for short terms in less expensive cities, including Austin, Texas; Charlotte, N.C.; and Berlin to see if she can find an amenable community with good health care and other resources.

Suzy Nguyen, a divorced writer in New York who is trying to save for retirement, plans to rent apartments for short terms in some less expensive cities to see if she could live there.Ava Pellor for The New York Times

Experts say building back a retirement fund is possible no matter what your age, although older women face a challenging path. “Folks in their mid-60s, who are done working, have a very difficult time recovering, and that’s a growing segment” of the divorced population, Ms. George said. In fact, women who divorce later in life experience a 45 percent decline in their standard of living. With these clients, Ms. George focuses on dividing what retirement assets exist and tapping into tools like reverse mortgages to secure homes and standards of living.

For women with more time, Ms. George’s three-part plan includes making a budget review, paying down debt to jump-start an emergency fund and then figuring out how to replenish retirement money.

Ms. Sparks, the divorce financial analyst, advises clients to put away 30 percent of their earnings toward retirement, to be divided equally between living and discretionary expenses, and aging care costs. This, said Ms. Kaplan, the Tucson therapist, requires steadfast frugality: “There aren’t going to be a lot of nights out and there aren’t going to be a lot of vacations.”

Although facing a solitary financial future can be terrifying, it can also feel empowering. Forced to look unflinchingly at my earnings and just how far they can (and cannot) stretch has made me methodical in figuring out how to cut expenses so I can increase my monthly I.R.A. contributions, and there’s satisfaction in watching them grow ever so slowly. This control is a relief — one I wish I’d granted myself years ago.

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