Divorce and Retiring Early. Two words that generally do not go well with each other. When a marriage dissolves, nobody comes out of it unscathed regardless of how the marriage ended. When children are involved it makes divorce even tougher to navigate. In any scenario there will be emotional and financial wounds that must be healed. Divorce can alter your plans to retire earlier, but it shouldn’t stop them. It might set you back a few years or it might not. More than ever, after a divorce, it’s time for you to re-write your own story. The financial fallout can be devastating and it’s very possible that it can take you years to recover from it. Assets and debts are going to be divided up.
Credit scores in many cases are likely to be affected (at least temporarily). Mentally, you’re probably going to be in a “fog” for several months which can affect your day-to-day work life. After a divorce, it’s more important than ever to find a path towards your personal freedom and refocus your life. Divorce may force you to downsize, which in the realm of retiring early, isn’t such a bad thing. Perhaps your ex didn’t share the same dreams and goals as you.
Now you have the freedom to pursue those dreams and live life on your terms. In 2019, it will be ten years since I separated and headed towards divorce. I made plenty of mistakes. I initially stuck my head in the sand and waited for the financial “nuclear bomb” that went off to go away. It didn’t take long for me to realize that this change in my life was also bringing a sense of peace with it. After a while, I got to work. It took me about four years to repair my credit score and recover from that disaster, but I did. If your goal is to retire early and you are currently going through a divorce, here are a few suggestions.
- Try your best to leave the lawyers out. If at all possible, mediate your divorce at a mediation center. I once had a retiring divorce attorney tell me “Mediate your divorce if you can because at the end of the day, you’re going to pay me $15,000 or more to end up at virtually the same spot as if you did it yourself.”
- Get your head right. Divorce can bring on all sorts of emotions some of which you have never encountered before. I went through depression for the first time in my life when I was going through my divorce. I wasn’t depressed because my marriage was over, but I was concerned about how it would affect my children. The “divorce fog” might hang over you for a few months, cluttering your thoughts and making normally easy decisions more difficult. Try meditating or perhaps yoga. Go talk to a counselor or life coach. Getting your head straight and getting back to normal is key.
- Find a new financial advisor and get your finances in order. When you’re going through a divorce, it’s going to be best to go out and find your own financial advisor. Using the same advisor as your ex is probably not the best idea. Don’t wait around on this tip, you want to address the financial aspect of your future as soon as possible. If needed, there are even financial advisors with a specialized certification called Certified Divorce Financial Analyst (CDFA). Folks with these certifications can help you navigate the tricky financial waters of divorce.
- Monitor your credit score. Normally I’d suggest monitoring your credit score once a year but if you’re going through a divorce, I’d suggest looking at your score at least quarterly. This will help you keep a handle on your debt, your borrowing power, and be aware of any surprises that may (and likely do!) pop up along the way.
- Keep your sense of humor. This is a big one. And it’s not easy. Divorce can be one of the darkest times of your life. Laughter can be a great prescription for getting you out of your fog and “righting the ship” of your life. Even though I was hurting during the summer of 2009, I often referred to it as my “freedom tour of 2009”.
- Give yourself time to recover. Financial recovery from a divorce is a marathon and not a sprint. Your plan to retire earlier might get blown up and instead of retiring in a year or two, it might take you four or five years. It’s okay. Do what you can do, move towards your goal, and let go of everything else. Focus, get a plan in place, and get going.
I know a lot of people that are in great marriages where their partnership works perfectly. I also know people that are miserable and trapped. They watch their own dreams and goals wash away while another year goes by. Freedom is what I live for. Freedom to do what I want, when I want, how I want and from where I want. If you’re thinking about retiring early, I’m sure freedom is near or at the top of your list, too. Life isn’t always a smooth ride, unfortunately divorces do happen. I’m very fortunate that today I have my life-partner Deb, who shares the same dreams and goals as I do.
Furthermore, looking back, I can see how my divorce set in motion a series of events that led me to where I am today. And guess what? Still Retired Early. Live free my friends