Divorce in mid-life can throw even the most carefully crafted retirement plans off track. As a professional woman, you’ve likely spent years building your career and planning for your future. Then divorce happens, and suddenly those plans need to be completely reconsidered. While it may feel overwhelming right now, know that it is possible to rebuild your retirement security. In this article, we’ll explore practical strategies for getting your retirement planning back on track after divorce.
Assessing Your New Financial Reality
The first step in rebuilding your retirement plan is to get a clear picture of where you stand financially. This means taking a thorough inventory of your assets, income, and expenses post-divorce. While this can feel daunting, especially if you weren’t deeply involved in the financial planning during your marriage, it’s crucial for moving forward.
Start by examining what assets you received in the divorce settlement. This might include retirement accounts, investment accounts, real estate, or other assets. Understanding not just the value, but also the tax implications and restrictions on these assets will help you make better decisions about how to use them going forward.
Next, look at your income and expenses. Your household income has likely changed significantly, even if you have a successful career. And your expenses may have changed as well. Perhaps you kept the house but now have higher maintenance costs, or maybe you downsized but have new expenses. Getting clarity on your cash flow will help you understand how much you can save for retirement going forward.
Understanding Your Retirement Needs
Now that you know where you stand, it’s time to think about where you want to go. What does retirement look like for you now? Perhaps your vision has changed along with your circumstances. Take some time to think about:
- When do you want to retire?
- What lifestyle do you envision?
- Where do you want to live?
- What activities or travel do you want to include?
- What financial obligations will you have?
Once you have a vision, you can start to put numbers to it. Work with a financial planner to determine how much you’ll need to save to support your desired retirement lifestyle. This may be different from the numbers you were working with when married. Don’t forget to consider things like healthcare costs that might have been covered under your ex-spouse’s plan.
Maximizing Your Retirement Savings
As a professional woman, you likely have access to workplace retirement benefits. Now is the time to maximize these opportunities. Consider the following strategies:
Maximize Your 401(k) Contributions
If you’re not already contributing the maximum to your workplace retirement plan, look for ways to increase your contributions. For 2025, you can contribute up to 23,500 to your 401(k), and if you′re over 50, you can make an additional 7,500 catch-up contribution (and an additional 11,250 if you are 60-63). Depending on your company’s plan there may be even more you can do. Certain plans will allow participants to do post-tax contributions up to the participant maximum of 70,000 and then convert those contributions to Roth in what is called a “mega backdoor Roth”. Check with your benefits department or your plan sponsor to see what options you may have.
Take Advantage of IRA Contributions
If you’re 50 or older, you can make catch-up contributions to your IRA accounts as well as your 401(k). For 2025, the IRA contribution limit is 7,000 and the catch-up is 1,000 for both Traditional and Roth IRA’s. A traditional IRA contribution won’t be tax deductible if you are also contributing to a 401(k), but you are still allowed to make the contribution. Catch-up contributions are particularly valuable if you need to make up for lost time or divided assets.
Consider a Roth IRA
If you qualify based on income, contributing to a Roth IRA can provide tax-free income in retirement. Even if your income is too high for direct contributions, you might be able to use the “backdoor Roth” strategy. The “backdoor Roth” requires additional tracking and tax forms so make sure you understand the process before trying it.
Explore HSA Contributions
If you have a high-deductible health plan, maxing out your Health Savings Account (HSA) provides triple tax advantages and can be an effective way to save for retirement healthcare costs.
Investment Strategies for Recovery
Your investment strategy may need to change post-divorce. Without a spouse’s income to fall back on, you might need to be more conservative with your investments. However, being too conservative could make it difficult to reach your goals. Consider these strategies:
Review Your Risk Tolerance
Assess how much risk you’re comfortable taking now that you’re managing your finances independently. Your risk tolerance might have changed, and that’s okay.
Diversify Appropriately
Ensure your investments are properly diversified across different asset classes, sectors, and geographic regions to manage risk while still pursuing growth. You can easily diversify your portfolio using broad market index funds rather than individual stocks or more targeted funds.
Consider Tax Efficiency
Look for ways to manage taxes on your investments, such as using tax-loss harvesting or placing tax-inefficient investments in retirement accounts. For example, bonds tend to be less tax-efficient than stocks, so if you can keep them in an IRA or 401(k) rather than a taxable brokerage account, that can be advantageous. However, you want to make sure that you maintain the proper level of risk across your portfolio while moving things around for tax efficiency.
Regular Rebalancing
Set up a regular schedule to review and rebalance your portfolio to maintain your target asset allocation. This is not something you need to do every day, but I recommend setting a calendar reminder for once or twice a year to review and rebalance your accounts if necessary. Not doing this can lead to taking on more or less risk than you are comfortable with overtime.
Protecting Your Future
As you rebuild your retirement plan, don’t forget about protecting your assets and income. Consider:
Insurance Coverage
Review your life, disability, and long-term care insurance needs. You might need to replace coverage that was previously provided through your spouse. And if part of your divorce settlement is alimony or child support from your ex-spouse, consider taking a life insurance policy out on your ex-spouse to protect the value of those payments.
Estate Planning
Update your estate planning documents, including wills, trusts, and beneficiary designations on retirement accounts and insurance policies.
Emergency Fund
Build or maintain an emergency fund to protect against unexpected expenses or income interruptions. Work towards having 6 to 12 months of expenses set aside in an emergency fund. As a single person, you may want to target the top end of this range because if you are laid off you won’t have a spouse’s income as a cushion. Keep your emergency fund in a high-yield savings account so that it is easily accessible but also earning a reasonable interest rate (many traditional bank savings accounts are paying significantly less than market rates).
Getting Professional Support
Rebuilding your retirement plan after divorce is complex. Consider working with professionals who can help you make informed decisions:
Financial Advisor
Work with a financial advisor who understands the unique challenges of divorce and can help you create a comprehensive plan. While many advisors require that you move assets to them to manage, there are a number of advisors that work on an hourly or project basis who can help you build a plan if you don’t have assets to manage (or don’t want to move them to an advisor). Check out networks like XYPN or NAPFA to find these types of advisors.
Tax Professional
Consult with a tax professional to understand the implications of your new financial situation and make tax-efficient decisions.
Estate Planning Attorney
Update your estate plan to reflect your new circumstances and protect your assets. This is particularly important if you have minor children as you want to make sure they are provided for should anything happen to you.
Conclusion
While divorce may have disrupted your retirement plans, it doesn’t have to derail them permanently. By taking a systematic approach to assessing your situation, maximizing your savings opportunities, and making smart investment decisions, you can rebuild your retirement security. Remember, you’ve already showed resilience and capability in your career – these same qualities will serve you well as you reset your retirement strategy.
Take action now by reviewing your current situation and implementing these strategies. Consider working with a financial advisor who can help you create a personalized plan for your new circumstances. Your retirement dreams are still within reach – they might just look a little different than you originally planned.
Sara Zuckerman, CFP®, CDFA® is the founder of Reset Financial Planning located in Scottsdale, AZ. She supports women across the country with a focus on helping divorcees and widows align their financial resources with their values to plan for the next chapter of their lives.
If you are interested in learning about how Reset Financial Planning can help you take charge of your finances as a newly single woman, please contact us at or schedule a free 20-minute consultation.
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Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for the purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Reset Financial Planning, LLC, and all rights are reserved.
