Planning and resetting financial priorities after divorce

Divorce marks the end of one chapter and the beginning of another. Beyond the emotional toll, it brings a completely new financial reality.

Your responsibilities, priorities, and lifestyle have shifted, and your financial setup needs to shift too. Naturally, this transition can feel overwhelming and that’s where the guidance of a good financial planner can make a meaningful difference.

When emotions are high and the details are complex, having an objective third party to help you regroup, refocus, and rebuild is invaluable.

Just as important is timing, some steps – like setting up a separate bank account or understanding your cash flow – should be taken early but other decisions, like investing lump sums or selling property, are best made when emotions have settled and you can think clearly.

A skilled adviser helps streamline and simplify this process, prioritising what needs to happen now and what can wait. Below is an example of how we supported a client through this transition and helped her not only stabilise her present but also build a secure, purposeful future.

Case study: investing the proceeds of divorce and planning for life beyond

Life’s unexpected turns can present both challenges and opportunities. This case study highlights how we helped Tina, a newly divorced client in her late 40s, transform her financial uncertainty into confidence and control – securing her future and empowering her financial independence.

Starting point

• Tina (49) had recently finalised her divorce. After purchasing a new home for herself and her two children, she had around $1 million left.
• The funds were sitting in her bank account, causing ongoing stress. Tina knew she needed to make smart decisions but felt overwhelmed and unprepared – these were financial matters she had never had to face before.
• Her key concern: how do I ensure this money lasts while also supporting my day-to-day life and long-term future?

Client objectives

• Remove the pressure of uninvested cash and decide how to best use the settlement.
• Create a balance between improving her current lifestyle and setting up for the future.
• Generate an additional $400 per week in passive income to reduce work stress and spend more time with her kids.
• Maximise her retirement savings and simplify her super structure.
• Preserve and enhance the purchasing power of her capital.
• Invest with purpose, but without excessive risk or complexity.

Key risks identified

• Losing purchasing power (and increasing anxiety) by leaving money in cash amid rising inflation.
• Low real returns after tax and inflation on fixed income options.
• Lack of investment experience and fear of making costly mistakes.
• Emotional decision-making under stress, without a clear plan.

Our approach

We designed a clear financial blueprint tailored to Tina’s new life, focusing on simplicity, confidence, and purpose:

• Invested $610,000 into a low-volatility, diversified portfolio to generate tax-effective and reliable income which allowed Tina to draw $20,000 per year while building capital in the background.
• Contributed $390,000 into superannuation, combining both concessional and non-concessional contributions to maximise long-term tax benefits and retirement growth.
• Consolidated her existing super funds and implemented a growth-oriented, low-cost investment strategy designed to require minimal day-to-day attention.
• Structured her super and non-super portfolios for future income growth to keep pace with rising costs.
• Put in place ongoing financial advice to help Tina stay on track, adapt to future changes, and avoid reactionary decisions.

Outcomes achieved

• Her non-super investments are generating additional income per year – meeting her goal of having extra $400/week.
• Additional investment income of $10,000 a year is being reinvested to grow her capital and future income.
• Superannuation on track to reach desired capital by retirement at age 60, providing $55,000/year in income.
• Total of $110,000 in capital growth achieved despite regular withdrawals, thanks to early action.
• $202,000 accumulated in super post-contribution, now working alongside her investments to secure her ideal retirement.
• Most importantly, Tina feels relieved, in control, and supported emotionally and financially.

The real value

What began as a stressful moment – a large sum of money and no plan – has turned into a foundation for confidence and freedom.

• Tina’s capital is now working in alignment with her new life.
• She’s enjoying more flexibility with work and time with her kids.
• The added income has allowed her to launch her own small business – something she had long dreamed of.
• Ongoing support means she doesn’t have to navigate future decisions alone.

Life after divorce comes with complexity – emotionally and financially. But with the right advice, structure and support, it’s possible to move from fear to freedom. Whether you’re navigating divorce settlement proceeds, rethinking your goals, or simply trying to find your feet again, a thoughtful financial plan can help you reset with clarity and confidence.

Meet Michal at Sydney Financial Planning or Find a Planner near you!

The Money & Life website is operated by the Financial Advice Association (FAAA). The views expressed in this article are those of the author and not those of the FAAA. The FAAA does not endorse or otherwise assume responsibility for any financial product advice which may be contained in the article. Nor does it endorse or assume responsibility for the information.