financial plan after divorce
A revised financial plan addressing the significant changes in income, assets, and goals following divorce.
Example
“The financial plan after divorce rebuilt retirement savings from zero and established individual credit.”
Memory Tip
REBUILD — divorce resets finances. New plan, new accounts, new goals.
Why It Matters
A financial plan after divorce is critical because divorce fundamentally restructures your financial life, affecting your income, expenses, assets, and long-term goals. Without a revised plan, you may face cash flow problems, inadequate retirement savings, or poor investment decisions that reflect your old married circumstances rather than your new financial reality.
Common Misconception
Many people assume that dividing assets 50/50 in a divorce settlement automatically puts them on equal financial footing, but this ignores that post-divorce expenses, earning capacity, and future obligations differ significantly between ex-spouses. A fair asset split does not guarantee adequate income or savings to maintain your desired lifestyle going forward.
In Practice
After a divorce, Sarah receives 50 percent of the marital assets totaling 300,000 dollars but loses her spouse's 75,000 dollar annual income and must now cover all household expenses alone at 4,500 dollars monthly. Her new financial plan redirects her 60,000 dollar annual salary to cover living costs, eliminates joint debt payments, adjusts her retirement contributions from 12 percent to 8 percent, and creates an emergency fund of 15,000 dollars before rebuilding long-term investments.
Etymology
Modern financial planning application — rebuilding after the financial disruption of divorce.
Common Misspellings
Get a free financial plan from a real advisor
Related Terms
More in financial planning
Other financial planning terms you should know
See Also
Need financial definitions?
Clear definitions for 2,500+ finance, insurance, and investing terms.