First, try to identify your goals. Are they reasonable and attainable? Next, identify and prioritize the obstacles and risks to your goals. For example, income tax was an obstacle, in a sense, that you might have successfully dealt with by deferral in the past. Divorce, though, was a risk that worked against income tax deferral in that your tax deferred assets were subject to ERISA's spousal protections. Carrying this example forward, you might need to evaluate these same two factors and try to prioritize them. If another marriage and then the "risk" of divorce were the greater risk, you might weight more of your assets to separate and sequestered title, for example, using a trust, rather than income tax deferral. If both were equal, you might consider a pre-nupt or some other way to protect against both risks prior to another marriage. These are just examples, possibly seemingly unlikely. There are many other risks to consider. The point is to go through this sort of process before rushing into a product or strategy decision.
Best wishes in your new life. Here are a few quick ideas to be considering.
Work out a personal budget and track your expenses. Often times new divorcees completely mismanage their budget because they are not used to the new income and expense level.
Don't make immediate and large purchases. Stay on budget and get used to the new lifestyle. Besides, you don't want to make an emotionally charged buying decision.
Carry sufficient insurance coverage. Making sure you have proper coverage will decrease your chances of needing emergency funds to cover unexpected health care costs or to replace household goods in the event of a problem.
For your scenario of being realtively young, keep expenses down and try to save any extra funds in a combination of your 401(k), Roth IRA, and brokerage/savings account.
Remember that you probably received a share of retirement benefits during the divorce and you may be able to claim a portion of your spouse’s social security benefits once you are eligible for benefits.
Dane Sorry to hear about your marriage. If you have children determine if you can file your taxes as Head of Household. Next, be sure to change the beneficiary on your 401K and any life insurance policies and IRA's. You still have 20 plus years of earning potential so don't stress too much. It is a time to reestablish your budget and determine a good deferral percentage and depending on your earnings level a Roth IRA may be possible. Make sure you rebuild your emergency cash reserves. Mark Schreiber CPA
Dane, I'm a little late to this discussion but I wondered how you're doing. Have you received good advice, perhaps from a local financial advisor? Have you used any of the advice my colleagues provided? Have you begun to rebuild your retirement savings? I would love to know.