Let’s look at Carol’s situation as an example.
Women's Divorce Financial Asset and Goal Planning
The Settlement
Five years ago, Carol was 47 years old, recently divorced , and ready to start a new chapter in her life. Her three children were grown with careers and families of their own.
She was awarded $575,000 in assets plus a monthly alimony payment in her divorce settlement.
💰 $200,000 cash settlement for her primary residence
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📄 $300,000 QDRO split from her ex-spouse’s 401(k)
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📄 $75,000 QDRO split from her ex-spouse’s Roth IRA
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📬 $500 monthly alimony for five years
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Carol loves her work as an administrative assistant and doesn’t plan to retire for at least another 10–15 years. She wanted to use the settlement to plan her financial future.
While she understood some about investing from participating in her employer-sponsored retirement plan, she didn’t know if she should hire a financial professional to guide her through this transition and beyond.
Professional Guidance
After a process of asking friends for referrals and meeting different advisors, she finally decided to work with a financial professional to create a financial and investment plan that took her long-term goals as a single woman into consideration.
Once the plan was in place her financial professional recommended an implementation and ongoing management of her portfolio that was aligned with her plan. This included investing the $300,000 traditional IRA and the $75,000 Roth IRA and systematically rebalancing it with the professional’s guidance.
While Carol’s three children were out of the house and on career path of their own, she often wondered how she would care for herself as she aged. She’d watched her father take care of his mother for five years before she died. At the end, her father was emotionally and financially exhausted. Carol didn’t want to do that to her children.
She purchased insurance to pay for care in her home or a care facility if she needed it in the future. She took $50,000 from her settlement to fund the policy.
Purchase or Rent a Home?
She then reviewed options for purchasing or renting a home. While she liked renting because the management company provided upkeep, she wondered if owning a home was in her financial best interests.
Interest rates were low. Supply of homes in her price range were plentiful. She decided to use $100,000 as a down payment on a home. Her mortgage would be less than her monthly rent plus she’d have a real estate investment to add to her portfolio.
Her financial advisor is also there when she has specific investment questions.
Not soon after the divorce was final, Carol received a tip from a friend about a tech stock that was poised for growth. After researching herself and asking her financial advisor, Carol opted not to purchase the stock. It didn’t fit her portfolio or long-term financial goals.
That turned out to be a smart choice. The following year the stock took big losses. The company eventually went bankrupt when a competitor copied their yet-to-be patented technology.
Carol is confident her settlement is invested with professionals her understand her family and financial goals. She meets with her advisor annually and is able to call or email as often as she needs. She trusts that her financial professionals are the experts which allows her to focus on her newly single life knowing her portfolio is positioned for positive results.
Shanna Reed uses clear guidance from financial planning and investment management strategies to help you, as her client, achieve your financial goals. The principles she utilizes have been studied by Vanguard with their Advisor’s Alpha research and have been demonstrated to be an effective method to save clients time while adding value.
