Starting Over

Dennis E. Quillen

I WILL NEVER FORGET that New Year’s Day nearly two decades ago. My life changed forever in a matter of minutes. I received in lightning bolt fashion the devastating news that my wife of nearly 40 years was filing for divorce. Looking back, I should have seen it coming. But at the time, I was totally unprepared. I didn’t know it then, but I was part of the initial wave of “gray divorces.”

No football bowl games that New Year’s Day. I spent the rest of the day trying to deal with my new reality. Emotional damage for sure. I felt hurt and betrayed. But as the hours passed, I began to think in a more reasoned way about all the implications of my new reality—family connections, social and business relationships and, yes, my financial wellbeing. Lifestyle changes were inevitable.

Basically, my carefully crafted retirement plan had been blown out of the water. My life would be greatly different from what I had expected, and had prepared for emotionally and financially. We budgeted throughout our marriage and had managed—or so I thought—to make sound use of our collective money for our children and ourselves.

We both had good retirement plans, including state pensions. I also contributed to a 403(b) plan and eventually opened Roth IRAs for both of us. We were both eligible for Social Security. I was recently retired and yet—thanks to my pension and Social Security—my income was about $2,000 a year more than my university teaching salary. My spouse, younger than me by five years, continued to work fulltime. We owned a nice, roomy condo in a historic district and were within walking distance of a neighborhood shopping area. Things looked great for our respective retirement years.

In the following weeks, and increasingly during the 17-month separated-but-not-divorced period, financial reality set in. As we divided our marital assets, the legal fees mounted. I also had moving expenses—635 miles to another state. It was clear early on that my net worth was shrinking by the month. I ended up both losing the condo and having to pay off the remaining mortgage. I also lost our newest car. When the divorce was finalized, I had an estimated loss well in excess of $50,000 in my personal net worth.

Shortly after, I began to think more optimistically. My net worth bottomed out and better times seemed to be on the horizon. It was clear that my income was significantly exceeding my annual expenses. My wisest decision, I feel, was preserving my annuity income, mutual-fund distributions, future freelance earnings and other income streams, while sacrificing things like the condo, the newest car, and lots of furniture and furnishings. I insisted on keeping my ’93 red Miata, though. My least wise decision, undoubtedly, happened years earlier—the “innocent” comingling of personal assets, such as cash gifts, with marital assets.

Within a year, I was once again a homeowner. I managed to pay off the new mortgage in five years. I focused on long-term investing and have seen a significant increase in my net worth during the post-divorce years. I also drew up a new financial plan for retirement. When will my expenses exceed my income? My latest calculations put the crossover point at age 112.

Dennis E. Quillen is a retired economic geographer and university professor. A fan of blackjack and long-term investing, his previous article was Getting Comped.

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