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A 63-year-old woman is finalizing a divorce after 35 years of marriage, during which her husband managed nearly all of their investment and retirement decisions. As part of the settlement, she is set to receive roughly $700,000 split between a portion of his 401(k) and a joint brokerage account. She has never independently managed an investment account, chosen a retirement withdrawal strategy, or made a Social Security claiming decision, and she now has to do all three largely on her own within the next year.
The $700,000 itself is a solid foundation for retirement at 63, but only if it gets structured correctly for someone who is single now, rather than left in whatever allocation her husband originally set up. The transition from managing money as a couple to managing it alone is where many people in her situation lose ground, not because the amount is wrong, but because the plan around it no longer fits her new circumstances.
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Splitting a retirement account in a divorce, often through a qualified domestic relations order for 401(k) assets, moves the money into her name, but it doesn't automatically restructure it around her individual retirement timeline, her risk tolerance, or her own Social Security strategy. The account may still reflect decisions made for a two-income household that no longer exists.
At 63, she's close enough to traditional retirement age that decisions about when to stop working and when to start drawing on the $700,000 need to be made deliberately, not left as a continuation of whatever her husband had set up years earlier.
After a marriage lasting at least ten years, the Social Security Administration allows a divorced spouse to potentially claim benefits based on an ex-spouse's earnings record, if that amount is higher than her own, without affecting the ex-spouse's benefit at all. Given 35 years of marriage, this is a detail worth investigating specifically, since many people going through divorce don't realize this option exists.
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