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Investing After Divorce: How a Certified Divorce Financial Analyst Can Guide You

Divorce is a challenging journey that can take an emotional and financial toll on anyone. As you reach the end of your divorce, you will find that you need to make decisions about many financial matters including how you will invest your assets after your divorce. This is where a Certified Divorce Financial Analyst® (CDFA®) can be your guiding light.

In this article, we will explore the importance of consulting a CDFA® and how they can help you make informed investment decisions after divorce.

Building Your Post-Divorce Investment Strategy

Once the dust settles and the divorce is finalized, it’s time to chart your financial course forward. Part of this process involves developing a solid investment strategy that takes into account your new financial circumstances and goals.

This process will involve assessing your assets, income, and expenses to create a customized investment plan. This plan considers how much and when you will need to start taking money from your investment accounts, your risk tolerance, and financial objectives, ensuring that your investments align with your post-divorce life.

Using Your Assets to Supplement Your Income

After divorce, many people find themselves in a position where the maintenance and child support they receive won’t cover their living expenses. By leveraging assets wisely, one can turn the page on the past and embrace a future filled with newfound financial resilience and independence.

One powerful strategy to supplement income during this transitional period is to take monthly distributions from the assets you received in your divorce. There are a few steps to determine the amount you should take monthly from your investment portfolio.

Determine the total amount of income you are receiving from maintenance, child support, work, etc.

Determine your monthly expenses.

You can use the gap between your total income and expenses as a starting point for the amount you should distribute from your investment account monthly.

We highly recommend you work with a divorce advisor to make sure that you are not jeopardizing your financial future with the monthly amount of money you are taking from your investments. It is important to ensure that you will still have enough assets to provide financial security for your entire life.

Allocating Your Divorce Assets

Once you understand the amount of money you will need to distribute from your accounts monthly and you have ensured that your distributions won’t negatively impact your financial future, you will then need to determine how you want to invest your assets.

The first step is to make sure you have enough money in a cash account (usually a checking, savings, or money market account). We recommend that you have an amount that is equal to at least six months of your monthly expenses. From there, we typically recommend that you have an amount that equals a minimum of five years of your distributions in fixed income (also known as bonds). These can tend to be less volatile assets and can provide stability to your investment accounts, especially if the stock market isn’t performing well. We then typically recommend that the remainder of your assets be invested in a diversified stock portfolio. Stocks have the potential to grow over time so that you are less likely to run out of assets before the end of your life.

Navigating Tax Implications

When crafting a well-rounded investment strategy, one often focuses on diversification, risk tolerance, and financial goals. However, an aspect that is sometimes overlooked, yet holds significant weight in shaping the overall success of an investment portfolio, is the consideration of tax implications. Designing an asset allocation with tax efficiency in mind can have a profound impact on long-term returns.

Understanding the tax consequences of different asset classes, investment vehicles, and holding periods allows investors to minimize tax liabilities and retain more of their hard-earned gains. Factors such as capital gains taxes, dividends, and the timing of asset sales can all influence after-tax returns. By integrating tax-efficient strategies into asset allocation decisions, investors can enhance the growth of their portfolios and create a more resilient and tax-friendly investment portfolio. As the saying goes, “It’s not what you earn, but what you keep,” and incorporating tax-conscious decisions into asset allocation is a prudent step toward maximizing investment returns.


In the aftermath of divorce, it’s crucial to make sound financial decisions that pave the way for a secure future. Consulting a Certified Divorce Financial Analyst® can be the key to achieving this. Their expertise in navigating the financial complexities of divorce and post-divorce life can be your greatest asset.
Remember, you don’t have to go through this journey alone. A CDFA® is there to guide you, providing clarity and confidence in your investment decisions. With their help, you can emerge from the storm of divorce with a bright financial future ahead.

Work with us

If you have more questions about divorce, our team is here to help you every step of the way. At Purposeful Wealth Advisors, we work closely with divorce attorneys, accountants, and other dedicated professionals to arrive at comprehensive solutions for our clients.
Contact us today to know more!