Starting Over at 50 - How to Rebuild Your Retirement Plan After Divorce
By Judd Allen, CDFA® Candidate
Divorce in your 50s wasn’t part of your original plan. You probably imagined heading into retirement with a clear timeline, a shared financial strategy, and maybe even a few vacations already mapped out. But life has a way of rewriting the script. Whether you initiated the divorce or found yourself on the receiving end, there’s one thing most people in this stage of life have in common: the financial future suddenly feels… uncertain.
But uncertain does not mean over. If you’re in your 50s and starting over financially, especially when it comes to retirement, there’s still a path forward. The goal now isn’t perfection - it’s clarity, control, and a steady hand on the wheel.
Taking Inventory: What’s Left, What’s Changed
The first step is taking an honest look at where you stand financially today. After a divorce, your assets and liabilities often look dramatically different than they did a year or two ago. Maybe your retirement accounts were split. Maybe you’re receiving or paying spousal support. Maybe you're now managing a household budget on your own for the first time in years.
Start with your retirement accounts - 401(k)s, IRAs, pensions. What’s your current balance? What contributions are you making now? Are those contributions automatic and consistent? Then look at your Social Security forecast. What benefits might be available to you, and at what age?
You don’t need all the answers today, but you do need visibility. Many people feel embarrassed that they don’t know what they have or where to find the numbers. That’s normal. A qualified advisor can help you get organized and review where you are now - without judgment.
Rethinking the Retirement Timeline
If you were planning to retire at 62, and now you’re wondering if that’s still realistic, you’re not alone. A divorce at this stage of life often comes with new expenses and fewer resources. But here’s the key insight: retirement is flexible.
You may need to extend your timeline. Delaying retirement by a few years can result in higher Social Security benefits, more time for compounding investment growth, and fewer years of withdrawals. This can significantly improve long-term sustainability - even if it wasn’t your original plan.
A good financial strategy accounts for the life you’re living now, not the one you were living five years ago.
Maximizing Catch-Up Contributions
Turning 50 comes with at least one silver lining: you’re now eligible for “catch-up contributions” to your retirement accounts.
In 2025, individuals age 50 and older can contribute up to:
$30,500 to a 401(k) ($23,000 base limit + $7,500 catch-up)
$8,000 to an IRA ($7,000 base + $1,000 catch-up)
If you can’t hit those numbers, contribute what you can - automatically. Automating even small increases can have a meaningful impact over time. And don’t forget to review how those funds are invested. Post-divorce, your risk tolerance, goals, and income may have shifted. Your investment strategy should reflect that.
Be sure to consult with a financial advisor to ensure your allocation aligns with your time horizon and goals.
Understand the New Tax Landscape
Divorce changes your filing status, income streams, and possibly your deductions. If you’re now filing as a single taxpayer or head of household, your tax bracket and liabilities may be different than in your married years.
Also, if you’re receiving or paying spousal support, the tax treatment depends on when your divorce was finalized. For divorces finalized before 2019, spousal support (alimony) is typically deductible for the payer and taxable for the recipient. For divorces finalized in 2019 or after, that treatment was eliminated.
This is another reason it’s wise to revisit your financial plan with a qualified tax or financial professional post-divorce. You may have more (or less) income than you realize after taxes are factored in.
Housing: The Emotional and Financial Crossroads
Housing is often the biggest financial decision post-divorce - and one of the most emotional. Many people keep the family home because it feels like the last piece of normalcy. Others consider buying right away to establish a fresh start. But here’s the truth: a home is not just a place to live. It’s a financial asset, and a potentially expensive one.
Ask yourself:
Can I afford the upkeep, taxes, and repairs on this home by myself?
Is the equity in this home helping or hindering my retirement plan?
Would downsizing or renting temporarily create more flexibility?
No one enjoys thinking about moving again, especially after a life shakeup. But for many people, the decision to right-size their living situation is what finally gives them room to breathe—financially and emotionally.
Eliminate High-Interest Debt
If you’re carrying credit card debt or personal loans with high interest rates, focus on paying those down before increasing investment risk. High-interest debt is a silent thief in retirement planning. Every dollar spent on interest is a dollar not growing for your future.
Many post-divorce individuals are also dealing with legal bills or new household expenses they didn’t have before. A structured debt reduction plan, alongside a revised monthly budget, helps create stability. You don’t need perfection. You just need a plan.
You Don’t Have to Do This Alone
Rebuilding after divorce isn’t just about math - it’s about mindset. You’ve been through a major life transition. Maybe you’re still navigating parenting schedules, changing social circles, or reimagining what your next decade could look like.
That’s why working with a financial advisor who understands the emotional and logistical side of divorce - not just the spreadsheets - can be so valuable. A Certified Divorce Financial Analyst® (CDFA®) or a retirement-focused advisor can help you evaluate your income sources, create a new investment strategy, and ensure that your retirement plan is built for this new version of your life.
A New Beginning, Not a Deadline
This may not be the retirement you envisioned ten years ago. But that doesn’t mean it won’t be a good one.
I’ve worked with individuals who thought they’d never recover financially after divorce - only to find themselves in a stronger, more confident position a few years later. The key isn’t having all the answers. It’s being willing to ask the right questions and get the right support.
You are not behind. You are rebuilding - with experience, wisdom, and a chance to do things on your terms.
