How will I survive, financially, after spousal maintenance ends?
Julie Kern, CPA, CFP®, CDFA®
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There is no way to sugar-coat this: Spousal maintenance is a ticking clock. Once you’re divorced, there is a carved-in-stone date at which it will end. That flow of funds will stop. The spigot will close.
So will you—must you—go off a financial cliff when that happens?
Spoiler alert: If you’re smart, the answer is “No.” As a CPA, a CERTIFIED FINANCIAL PLANNER® professional, and a Certified Divorce Financial Analyst® professional who provides divorce financial counseling for affluent women like you, let me weigh in. Let me give you some quick pointers. And let me open your mind to a few possibilities you might not have considered.
First, let’s talk about this from a mental/emotional perspective. Too many women wait until the spousal-maintenance period is almost over, before they do anything. That’s a huge mistake. Don’t fool yourself into “living normally,” as you had when you were married, and then have an “uh-oh moment” in which you realize it’s ending in three months—and then you suddenly need to spend down your assets that you need to save for retirement.
Think of the new reality now. And face some truths. If, as a married couple, there was “X income” supporting one household, and then, after divorce, you split that for two households, there will simply be less for each. You need to wrap your head around the fact that you may well be living a less affluent lifestyle.
If this sounds doom-and-gloom, let me brighten the picture for you. The “ticking clock” of the spousal maintenance period should be your timeframe to plan your financial future, to gain new skills, brush up your resume, and make yourself hire-able. If retirement is in your somewhat-near future, but not your immediate future, think of it this way: You may need to work, simply to close the gap between end-of-spousal-maintenance and beginning-of-retirement.
There are also tax and accounting strategies (I’m a CPA, remember?) that can effectively let you “retire early” without financial penalties from the IRS. There’s something called a 72(t) election, which provides for SEPP, or “substantially equal periodic payments”… I won’t get into the weeds here, but this can be huge if you have lots of retirement assets at divorce—and precious few non-retirement assets.
There’s also the upside of the psychological battle. You might be quite surprised at how many divorcing women I serve look forward to the prospect of rejoining the workforce! It’s absolutely true: You get a new community. New friends. New co-workers. New income. A new sense of identity beyond “wife” and “mother.” And talk about empowerment: Imagine how good it feels, after all these years, to make all the decisions yourself, without someone else telling you how it should be.
Post-divorce life can be totally fulfilling. I know. I’m divorced. And I’d love to help you.
Contact me today and let’s get you started.
