“I’d rather regret the things I’ve done than regret the things I haven’t done.” –Lucille Ball
If there’s one thing all my clients have in common it’s that they’re used to experiencing change.
Actually, we ALL have that in common. Human beings go through change in the course of our lives; that’s the natural way of things. Even in the midst of sorrow and sadness, we can, perhaps, take a little comfort in the fact that things will ALWAYS change. Our lives simply aren’t allowed to remain stagnant.
I’ve been thinking more about change recently, though, because many of my clients are experiencing change this spring.
Take Jennifer*. Jennifer is going to be 52 next year. She is recently separated from her husband after 22 years of marriage. They have two kids, both of whom are in college. Jennifer works as an attorney who chose to stay home for 5 years when her kids were younger. Jennifer’s income has consistently increased over the last 10 years. She has retirement savings, but it’s less than her husband’s. Jennifer and her husband had a very comfortable lifestyle but with the divorce, Jennifer is concerned about maintaining her lifestyle and about her plans for retirement.
Jennifer wanted to understand what her financial options are, including how to divide their assets, and how to make the most of her income going forward.
1. How should we divide assets – what is equitable? (Equitable doesn’t necessarily mean equal; it means fair or impartial, depending on the situation.)
2. How will my lifestyle change now? What changes do I need to make to keep living the life I want to live?
3. How is this divorce going to impact my plans for retirement?
Here's how I responded.
1. Well, it depends! It isn’t necessarily a 50-50 split of all assets. It can be more complicated than that. For instance, if one of the partners was a stay-at-home parent, and out of the workforce, how is their current income impacted by that decision? Additionally, how are their retirement balances impacted by that decision?
Here's another example: if one partner inherited family assets, generally those assets should not be co-mingled and should remain with the partner who inherited them. However, again, it can be more complicated, especially if the assets WERE co-mingled. Questions about where and how much need to be answered before any decisions are made.
In short: communication is key. And if the partners are not able to effectively communicate, this may be a case where a third-party mediator needs to be brought in to the situation. Even if you ARE able to communicate effectively, and you have numerous assets, you should consider a mediator to help provide an equitable solution.
2. The first thing you need to do is look at your budget. Do you know how much you’re spending on what?
Once you’ve got a clear picture of income coming in and expenses going out, it’s time to decide what you value. For example:
Do you own a family home and do you value keeping that home? Or have you agreed to sell the property? Perhaps you value the idea of having a place for your children to live or to return to that is familiar to them; if so, does your income allow you to maintain that property? If not, how will you negotiate with your former partner to help maintain that property?
Here's another example. As a married couple, you were planning on traveling and retiring early at 62; now, however, you’re not able to travel as extensively on one income – and maybe…you don’t even WANT to retire early!
3. Well, the facts are these: you may have to plan on working for a longer period of time, you may have to ramp up your savings, you might have to consider finding a different job where you’ll earn more money every month, and you might have to consider “semi-retirement,” where you still work some of the time. Every situation is, of course, unique. The point is, things ARE going to change – and it’s important to be aware of that fact.
Additionally, since I believe in wealth and wellbeing here at WEWM, I offered Jennifer a few additional things to think through. After all, going through a divorce is NOT easy.
I suggested that she:
1. Seek support from friends and family
2. Consider seeing a therapist or counselor to help you process your emotions
3. Take time for self-care!!! This includes exercise, meditation, letting yourself indulge in your hobbies!
4. Focus on your goals and values to help you stay motivated
You know, people often ask me why I love doing the work I do. And my answer is pretty simple. I’m helping people navigate change. I’m offering guidance and support and I’m allowing my clients to feel good about the choices they’re making for their financial wellbeing. Most important to this process is putting together a thorough financial plan that looks at your whole financial picture. This allows you to make good decisions and allows you to understand the impact of each decision you choose to make.
By working with her advisor (me!), Jennifer was able to start navigating her divorce, taking steps to care for her emotional and mental wellbeing, and feeling much more financially empowered as she continues to work through this change.
What change are YOU navigating this spring? How can I support you as YOU make moves in 2023?
*not her real name