For most women going through divorce, one question lurks beneath the surface of each decision:
Am I going to be okay?
And a flurry of other questions like it come up:
- Will I have enough money to live?
- Can I support my children?
- What happens to retirement?
- Can I afford to stay in my house?
- Will the decisions I make now still make sense five or 10 years from now?
These are significant questions to answer when so much feels unsettled.
And more women are facing questions like this later in life. In 2023, the median age of a woman experiencing her first divorce in the United States was 41.9, according to the National Center for Family & Marriage Research at Bowling Green State University. Divorce rates have also risen among adults age 45 and older since 1990.
For women who have spent decades building careers, raising families, saving for retirement, buying homes, and accumulating wealth alongside a spouse, divorce can reshape their financial life.
“Divorce is a grief process, and stress levels are similar to the death of a spouse. It’s normal to feel this way, because not only are you grieving for the death of a marriage, but you are also grieving for the loss of what your vision of the future would be,” says Monica Dwyer, Certified Financial Planner™ and Certified Divorce Financial Analyst® (CDFA®) at Harvest.
Thoughtful financial planning during divorce can help create structure and confidence.
Start by understanding your financial picture
Some women have always handled the household finances. Other women may have managed other household tasks, while their spouse handled investments, retirement accounts, taxes, insurance, or other assets.
Even women who make complex decisions every day in their careers can find themselves facing financial issues and divorce rules they have never had a reason to study before.
Joy Schlie, Certified Financial Planner™ and Certified Divorce Financial Analyst® (CDFA®) at Harvest Financial Advisors, says the first conversation between a woman and a financial advisor often begins by figuring out her current circumstances. Some women do not even know how much or what type of assets they have, especially if their husband was the Chief Financial Officer of the household.
“We start with what each person understands. Where are they in the divorce process? What are their goals? What do they want to prioritize? I want to give her concrete steps so she feels in control of her financial life.”
Monica recalls meeting with one woman who brought in a large stack of financial documents because she was unsure what it all meant.
“She brought in paperwork and tax returns, not sure how to sort through it all or even where to find additional assets that she felt were being hidden from her. During our meeting, we found an account referenced that wasn’t contained in the paperwork. I told her, ‘See if you can find any additional tax documentation or statements referencing this particular account.’ ”
Financial planning during divorce often begins with developing as complete a picture as possible of accounts, assets, debts, income, expenses, insurance, retirement benefits, and other obligations. From there, they can begin evaluating what those resources may mean for the decisions ahead.
Sometimes the planning process reveals a sustainable path. Sometimes it identifies an issue that deserves reconsideration before finalizing the settlement.
Monica and Joy tell clients that, in their experience, it can take one to three years after divorce to settle into a new normal.
Look beyond the settlement day
A proposed settlement can look reasonable on paper and still raise important questions about the future.
- What will your monthly expenses look like on one income?
- How might taxes change?
- Can I do Roth conversions while my income is low but I am getting spousal support?
- If keeping the family home matters deeply, what could owning and maintaining it require over time and can I afford it?
Different assets can affect your future in different ways. Cash, retirement accounts, pensions, and home equity may each have different tax considerations, access rules, and long-term value.
At this stage, it’s important to zoom out and ask a broader question first: How could the choices I make today affect the life I want to build? Once the divorce papers are finalized, there is no going back on most of the negotiated items.
Research based on Health and Retirement Study data found that women who divorced after age 50 experienced an average 45% decline in their standard of living, compared with 21% for men. Both women and men also experienced substantial declines in wealth.
These findings underscore why evaluating the long-term effects of a settlement can be so important, especially for women divorcing later in life.
“Women often feel relieved once they’ve created a plan that shows what may be possible for them,” says Monica.
Why work with a divorce financial analyst?
A financial advisor can help with many aspects of financial planning. A Certified Divorce Financial Analyst® (CDFA) has additional specialized training focused on the financial issues that arise during divorce. That training may include evaluating settlement options, retirement benefits, pensions, taxes, housing decisions, support arrangements, and long-term financial outcomes.
Monica and Joy are both CDFAs and fiduciary financial advisors. Their dual expertise brings together broad financial planning experience, specialized divorce training, and a fiduciary responsibility to work in their clients’ best interests.
For Joy, pursuing CDFA credentials was driven by a deeper motivation.
“We try to help people in as many ways as we can. I realized that when people were going through divorces, I didn’t have enough education to really dig into the weeds and help them. I wanted more information so I could help more people,” said Joy.
For women searching for a divorce financial planner or comparing fee-only firms with CDFA professionals, those distinctions are worth understanding.
Attorneys and CDFAs have different roles
A divorce attorney naturally plays an essential role, advising on legal rights, representing your interests during negotiations, helping develop the legal agreement, and guiding you through the court process.
A divorce financial professional looks closely at the financial implications of those decisions:
- What might different settlement scenarios mean for your cash flow?
- How could a specific decision affect retirement?
- Are there financial consequences that deserve more attention before an agreement is finalized?
A CDFA does not replace an attorney or provide legal advice. The two professionals complement one another.
For some women, the right team may also include mediators, divorce coaches, mental health professionals, and Certified Divorce Lending Professionals. Harvest has relationships with professionals in each of these areas and can help our clients find additional expertise.
Questions that can help guide the divorce planning process
Knowing the questions to ask, daunting as they may seem, is an important step. Our clients have found the following questions helpful as they make decisions:
- Do I know what we own, what we owe, what comes in, and what has to be paid?
- Do I know what my life could cost after divorce?
- How could this settlement affect my retirement and other long-term goals?
- If I keep the house, can I afford the mortgage, taxes, maintenance, and repairs over time?
- How could different settlement options affect my cash flow and taxes?
- Do I have the right professionals helping me understand the financial and legal implications of these decisions?
If you are going through divorce and are wondering what your financial future could look like, Joy or Monica would be glad to talk with you.
Questions we’re often asked about divorce planning
When should I talk to a financial planner during divorce?
Ideally, financial planning begins before a settlement is finalized, while there is still time to evaluate options that may affect cash flow, taxes, retirement, housing, and other long-term goals. A divorce financial planner can help organize the financial picture and identify questions worth exploring with your attorney and other professionals. They may even be able to find creative solutions that other professionals had not thought of.
What does a Certified Divorce Financial Analyst® do?
A Certified Divorce Financial Analyst® (CDFA®) has specialized training in the financial issues that commonly arise during divorce, including settlement analysis, retirement accounts, pensions, taxes, housing decisions, support arrangements, and long-term financial planning. A CDFA’s role is to help clients better understand the financial implications of the choices in front of them.
Why does working with a fiduciary matter during divorce?
Many people assume every financial advisor is required to put a client’s interests first. That’s not always the case.
Some financial professionals work as brokers, whose role often includes recommending or selling investments that earn them commissions. On the other hand, fiduciary financial advisors are held to a different standard: when providing investment advice, they are required to put the client’s interests ahead of their own.
That distinction can matter during divorce, when decisions about investments, retirement accounts, housing, taxes, and future cash flow may all affect one another.
Learn more about why fiduciary advice matters.
Should I keep the family home after divorce?
That depends on the full financial picture. Beyond the value of the home itself, it is important to consider mortgage costs, refinancing, taxes, maintenance, insurance, and whether keeping the home fits within your long-term financial plan. Emotional priorities matter, too, which is why the decision deserves careful evaluation.
Who else should be part of my divorce team?
That depends on your circumstances. In addition to an attorney and financial advisor, other professionals with specific expertise may be beneficial.
- A Certified Divorce Lending Professional can help evaluate whether a mortgage or refinancing plan is realistic and whether the timing written into a divorce agreement can work with lending requirements.
- A mediator can help spouses work through issues in a neutral setting.
- A divorce coach may help with communication, decision-making, and navigating difficult interactions. A divorce coach typically only works with one of the parties to divorce, not both.
- A mental health professional can provide support for the emotional strain that often accompanies divorce.
Harvest maintains relationships with professionals across these areas, creating a network that connects the financial planning process with the legal and practical realities of divorce. Our advisors share this network with our clients so they may benefit from additional expertise.
Disclosure: Harvest Financial Advisors is a Registered Investment Adviser. This content is for informational purposes only and does not constitute a complete description of our investment services or personalized financial, tax, or legal advice. Divorce laws, tax consequences, Social Security rules, and individual financial circumstances vary. Consult with qualified legal, tax, and financial professionals regarding your specific situation before making financial or legal decisions.
Sources
- Median Age at First Divorce, 2023 https://www.bgsu.edu/ncfmr/resources/data/family-profiles
- Age Variation in the Refined Divorce Rate, 1990 & 2023 https://www.bgsu.edu/ncfmr/resources/data/family-profiles/FP-25-24
- he Economic Consequences of Gray Divorce for Women and Men https://pubmed.ncbi.nlm.nih.gov/32906147/
