It’s amazing what a difference a few years makes. Well, a few years without an expensive spouse and with a high income. But still, it’s amazing.
Or at least I was amazed when I last logged into my Vanguard account and saw my balance was 400% of what it was three years ago.

Obviously, some of this is due to the crazy, definitely-not-sustainable market we’ve been having — Vanguard says I’ve seen an 18.3% return — and I started with a pretty small amount (relatively speaking). But a lot of is also that I finally have the money to invest. And the knowledge of what not to do — which unfortunately, I learned the hard way.
My first mistake
Impressively, even just my first move toward retirement savings was a misstep: I created an account at my bank.
I wasn’t aware at the time that banks have much higher fees compared to companies like Fidelity or Vanguard. A reader told me in the comments of the post where I announced I’d finally opened a Roth IRA.
But at the time I was still not properly medicated for my depression and was stressed out managing the finances, appointments and most other logistics of a household with two chronically ill people. It was a small miracle I’d managed to start an account at all. Every time I thought about how I should move to Vanguard, I got so weary that I wanted to go lie down.
So for about eight years, I kept my retirement funds where I was getting charged more than necessary.
Fun fact: Even before officially deciding the divorce was going to happen, I knew it on some level; and the idea of being free is likely what finally allowed me the mental energy to get started with Vanguard and get the money transferred. Another way the divorce saved my finances, I suppose.
The biggest one as that I was afraid to lose what little money we could afford to invest. So I went with medium risk.
I was only about 30, so I should have let them do high risk. There was plenty of time for my portfolio to recover from any dips. But I guess I just didn’t know better, and the thought of losing money when we could put in so little ($100 a month) was just too much to contemplate.
Compounding (har har) my mistake
My next, far bigger mistake was due to anxiety.
We knew Tim would probably never work again, so my money would be the only contributions we would have for retirement funds. And they were meager as it was. I had $25 a week auto-transferred out of the main account in preparation for the whopping $100 contribution we could afford each month. And “afford” is a bit of a stretch, since at the time we were still paying off debt.
So when the bank guy asked me how high of a risk I wanted, I said that I was concerned about losing what little money we could put in. And I chose a medium-risk option.
I’m a little angry, frankly, that he didn’t argue at all. If he had said that there would be decades to recover from any dip, I might have seen reason and gone with a higher-risk option. But I didn’t.
So my investments didn’t grow the way they could have.
And the anxiety hindered me further because even once I was earning good money, I didn’t increase my IRA contributions for far too long. There were always looming expenses — the house needed new windows and to be insulated, my in-laws in the guest house desperately needed their own A/C unit, Tim’s teeth were going to be $15,000 or more, etc. — so it never felt like I had the spare funds.
So I didn’t increase my contributions until I was around 36 or 37 — and I’d been making good money for at least four years at that point.
And even when I did finally increase my contributions, I only went up to $300 a month. I absolutely could have maxed it out and we’d have been fine — just slightly delayed on some projects. But I couldn’t bring myself to do it. It felt like we were barely making progress as it was.
As a result, at age 40, I had only $40,000 saved.
I still had perspective
Don’t get me wrong, I know that that’s more than a lot of folks have. Heck, about half of American households don’t even have retirement accounts. So I was and am aware that this was a First World Problem.
And of course, I wasn’t as far behind as the plethora of FIRE bloggers made me feel.
According to Smart Asset, I was only about $11,000 below the average for ages 35 to 44. And the same article says that the median balance for all Americans with retirement accounts is only $65,000.
But of course, it didn’t matter whether my balance was average. It mattered that the balance was far, far, far below what I’d need to retire comfortably.
So I was galvanized to save more. And without having to take care of Tim — financially or emotionally/physically — I had the money and mental wherewithal to actually get serious about saving.
Getting the ball rolling
As I said, just knowing (on some level) that I was headed for divorce gave me the brain space to finally start a SEP-IRA for my S-corp.
And from the two paychecks I got before I told Tim the marriage was over, I was able to put away $900. And I had maxed out the Roth with our tax refund. So I was already improving big time.
Due to the costs of the divorce, I had to skip contributions for September and October.
But once I started up again, there was no stopping me.
My finally freed finances
In the last two months of the year, I was able to put about $1,575 into the SEP.
The following year, without Tim’s expenses (one of which was $600 to $700 a month), I was able to max out the SEP. Lest anyone Google this and think I put away $57,000… No. But I was able to put away 25% of what I have my S-corp pay me as an employee. And I fully funded the Roth.
Though admittedly the latter was helped by another large tax refund. (I didn’t have to split it because I had earned all of the taxable income in the prior year.)
Last year — helped by my yearly bonus and one last large tax refund before I finally got a clue and lowered my estimated payments — I maxed both accounts out in the fall. So I was able to open a solo 401(k) and contribute about $6,000 on top of my Roth and SEP money.
So getting to where I only have to pay for myself has been transformational for my chances at retirement.
My savings have gone up as well.
Compounding is magic
But of course the most important part of my much-larger contributions is that I’m starting with 25 to 30 years left to compound.
Obviously, it would be better if this had happened when I was 30 or even 35. But you know what they say about planting trees.
So yeah, ttwo and a half to three decades is still a good chunk of time for the financial snowball to really get underway. In fact, it already has.
I always heard that once you hit six figures, your gains really take off. Intellectually, it made sense, but it never really resonated with me. Until I got there myself. Well… after a false start.
In August of 2020 — just shy of two years after separating my finances from Tim — I briefly hit six figures. (Again, a lot of credit goes to the stock market, but I’d also contributed quite a bit of money in that time.) But there was a downturn for a couple of months, and I was back down to the high five figures. I know, I know, that’s hardly a tragedy.
But as of last November, I was back at six figures. And in the time since, the portfolio balance has increased by about $58,500. And almost half of that growth has been just from investment returns.
Again, a crazy market plays a big part. The snowball effect wouldn’t be quite as impressive under normal market conditions. But even if we were at the historical average of 7%, I imagine the progress would still have shocked me.
Because, of course, the more money there is to earn returns on, the faster the interest (and thus your balance) will grow. And as it grows, there’s even more money to earn returns. And so on and so forth.
There will have to be a market downturn/correction/whatever at some point, of course. So I’m not banking (so to speak) on the progress staying this quick forever. I’m just hoping any major downturn/correction happens when my portfolio still has a couple of decades left to recover.
But regardless of what my future balance looks like, it’s clear that the divorce is what saved me financially.
Not usually how it goes
I know this is the inverse of many people’s divorce experience. Beyond the lawyer bills and dividing of assets, women’s financial security tends to go down post-divorce, whereas most men’s goes up.
I just got lucky in that Tim was reasonable about acknowledging that basically all financial progress we made during the marriage was due to my efforts, my income or both. So he didn’t fight me in the divorce, meaning it was a quick, pretty affordable (relatively speaking) process.
So that allowed me to keep the progress I had made toward financial security.
Getting better and better
Not only did the divorce not hurt my financial position, it ultimately is how I’ve been able to make such great progress.
The expenses I generate on my own are much lower than the ones Tim and I had while together. So leaving the marriage made a huge difference.
Pre-divorce, we were saving about 17.8% of our overall income, with about 3% going into my retirement accounts, plus putting 6% of the income into additional mortgage principal.
After the divorce, my income was about 8% lower than our combined one had been. But in the first year alone, I put 20% of my income into retirement and 11% into savings. Seven percent went into paying extra on the mortgage.
Last year, I put 25.3% of my income into retirement and 10.3% into savings. And 8.5% of my income went to additional principal payments on the house.
With a month to go in the year, I haven’t calculated all of my rates yet, but so far 29% of income has gone into retirement.
And next year will be even better!
Now that I don’t have a mortgage. Even after accounting for repayments to Mom, I’ll have at least 5% more income free for my savings or retirement accounts.
And that means I’ll almost definitely be okay in retirement.
Running the numbers
The calculators say that if I could match my 2021 contribution amount for three more years and then never put in another cent, I could retire at 65 and be okay until age 96. If I can match the 2021 for five more years (then nothing more), I’d have to live well past 100 before I’d be in trouble.
Granted, no one knows for sure what their future expenses will be. But even if my income went down, it’s unlikely I’d have to stop contributing to retirement altogether. Also, the numbers above don’t include Social Security. And unless politicians commit political suicide by abolishing FICA taxes, the SSA will still have some amount of funds in my golden years.
So yeah, I’m increasingly certain I don’t have to worry about scrimping in retirement. Which is something I certainly couldn’t have said three years ago.
And of course, it’s not all about money. My quality of life is better.
The marriage didn’t just cause financial stress; there was stress from having so many responsibilities. By the end of the marriage, I was running most of the errands, and throughout the marriage, I did nearly all the chores, was the one dealing with both of our insurance plans, made doctor appointments (and usually had to go with Tim to his), managed the household finances, etc. That stress — and the resentment toward Tim that, in hindsight, it very clearly caused — made my depression worse.
Without some of those stressors, my depression is better controlled overall, which makes my life better as a whole. It allowed me to go out more in 2019 and post-vaccine (before case numbers started climbing again) and actually enjoy life and nightlife and… whatever, really.
So really, besides going into therapy lo those many years ago, the divorce has been the best choice I’ve ever made. Both for myself and my finances.
Anyone else freed up (financially or otherwise) by divorce?
Related reading:
You really haven’t mentioned another factor — how much he spent on junk food, and how much you spent to keep him happy (like some special lights for spotlighting the…pool table, I think). And since you now document what YOU spend on practically everything for the weekly lists, I think you’re helping keep yourself to a healthy level.
That adds up, too.
I am lucky — have a great guy in my life. The Brick and I will be married 40 years, come Dec. 26. But I have also been secretly amused by how he changed after he retired. Groceries? I was the one to get them — now that he goes on occasion as well, he is much more aware (and griping about) food prices. He is far less apt to stop at fast food for a quick snack…although I can’t seem to break him of going there for most meals while I’m out of town on a trip. And he is much more aware when our income doesn’t cover the bills, now that it’s generally fixed.
All good things. (And frankly, a lot of guys seem to think differently about this than we women do.)
Well, I eat and ate the junk food. But takeout, yeah he ate a ton of that, which definitely added up. Even before minimum wage increased. And yeah, I indulged in a fair number of things to placate him. Partially because I did want him to be happy but also so we just wouldn’t argue. Though I stood my ground enough to have a fair number of arguments there. I’m tired just thinking about it, honestly.
I’m glad he’s made some adjustments in retirement. It’s always interesting to see what it is that gets people to pay more attention to costs. But it’s awesome that you two are still going strong four decades in. And happy early anniversary.
Freed up in every way possible. But you already knew that.
Donna Freedman recently posted…Extreme Frugality: Use all the bits.
Good for you, Abby! I’m glad you’re happier and in a better financial situation now. I will say this: obviously there’s a reason (or should I say, reasons) you aren’t married to Tim anymore, but thank goodness he was decent about the split. I’ve known too many couples who didn’t have that situation. 🙁
Now please write a post with bathroom renovation pics! Or at least the new patio… I am dying to see all these home improvements!
Haha if I had a completed patio or bathroom, I promise you I would.
As the spending diary explains, after all of this time, the patio only finally got a basic frame up as of the Sunday before last, and I still needs board running horizontally between the posts at around the 3′ mark before I can start screening the damn thing in. My friend was going to come over and help me do that today, but I was exhausted from yesterday (Saturday) when I took the vanity out. It was supposed to be “took the vanity and medicine cabinet out, took down the new light fixture and finished painting” buuuut naturally it proved more difficult than expected. Specifically, it took me ages to get the pipes turned off — one was rusted open and one didn’t have a knob to turn — and then due to various issues it took me probably 90 minutes (or more) to move and dismantle the vanity.
So as things stand, if I feel up to it Wednesday (I’m getting my booster shot in the early afternoon, so I probably have a few to several hours before any side effects hit), my trivia friend is going to come by and help me get the horizontal boards cut and attached. And Monday/Tuesday I’m going to try to sand down the bumps on the bathroom wall from where they painted around the vanity/medicine cabinet, then I’ll take down the light fixture and finish painting. At which point, I can finally take apart the fiberglass shower stall, pray nothing’s wrong with the shower pan (because a new one would have to be made by hand thanks to my shower’s weird dimensions), put in two pieces of 2×4 between two wall studs so I can screw in a premade shower niche for the guy to tile over, buy the tile and FINALLY call the guy in to tile.
Oh, and I when I took off the vanity, I found that the current water supply pipes are too far apart to be hidden by the pedestal sink base. And since some of the drywall around them is toast anyway, I may let my friend talk me into trying to move them closer together.
Nothing in home improvement EVER seems to run smoothly.
This is very inspiring!! Just thinking about my divorce i left with my clothes and maybe some household goods? I don’t even think that because whatever household goods i did have i had to get rid of. No car, no place, all i had was a job which was working at 7-11 as a cashier but i was smart and started a 401k while i was there. I left that job for a better paying one with $4,000 in that 401k that I ended up cashing out to get me a car but with two small kids and catching the bus it was a safety net. I went on to the IRS.gov and looked up my past earnings and my earning went up significantly after the divorce. That’s what happens when the woman stays home most of the time with the kids and paying for childcare it eats away at the income. Not to mention every time they were sick or i missed a day of work that was a day without pay. I feel we both have come very far and I’m very very proud of you Abby. It’s never to late
Aw thanks! And yeah, it’s never ideal to cash in a retirement account, but being without a car, with two small kids and being the sole income earner (so can’t afford to be late to work because the bus was late) can mean a car is a necessity. And it sounds like it worked out well for you.
It’s amazing how things change — both financially and happiness wise. I’m proud of you too!