I’m 60, just divorced, and lost $1.2 million in the process — will I ever recover from this setback? Here’s how to build a secure retirement even when you have to rebuild your life

How to evaluate your situation

Dividing up your assets and losing $1.2 million in a divorce isn’t just a blow to your net worth — it can completely reshape your financial future. Having the right strategy is key to retiring comfortably.

The first step is to take stock of your current financial picture. Start by assessing:

• Short-term liquidity: Do you have enough cash for emergencies and necessary expenses without dipping into long-term investments?
• Monthly expenses: How much are your monthly expenses, especially if you plan to retire soon?
• Housing decisions: If you still share property now that you’re no longer married, would buying out your ex make sense, or would selling and downsizing give you greater financial flexibility?

Next, consider your financial stability. Evaluate the ideal time to claim the Canada Pension Plan (CPP) for maximum benefits. The longer you wait, the better. CPP benefits increase 8.4% per year until age 70.

When it comes to withdrawals, running multiple scenarios, the straightforward 4% rule, which experts are now saying should be closer to 3.7%,and perhaps even testing a more aggressive 5% withdrawal can help you determine if your savings can support your lifestyle. Suppose you have $2.5 million in retirement accounts and savings. A 5% annual withdrawal would give you $125,000 per year, or about $10,415 per month — well above the average retiree’s income. Even sticking to 4% would translate to $100,000 a year or about $8,333 a month.

For context, a recent by BMO survey found that Canadian adults believe they need $1.54 million to retire. However, the average couple aged 55 to 64 has $1,006,013 saved for retirement., with that number dropping to $339,910 for single individuals.

With your financial foundation, you’re ahead of the curve, but to make your retirement more secure, you can continue rebuilding your finances in many ways.

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Rebuilding your investment strategy

Rebuilding your finances after a divorce takes time, even if you have a solid amount saved. But not everyone will be fortunate enough to have $2.5 million to fall back on after a costly breakup.

However much you’re working with, start by reviewing your investments. To lower your risk, you may want to redistribute your portfolio and diversify across different assets like stocks, bonds and savings accounts. Dividend stocks can provide regular income and improve your financial stability throughout retirement.

If you’re unsure about retirement, work a few more years to increase your savings. You can delay CPP payments to increase your monthly benefits and get more income for the long haul.

You don’t have to stick with full-time work to stay financially secure. Part-time or freelance jobs can help bring in extra cash. You can even rent out part of your home or start a small side business to add new income streams.

A good tip is to consult a financial advisor even if the numbers say you’re in good shape. They can help you make smarter decisions about your savings, minimize taxes when withdrawing funds and decide whether to keep or sell your home.

The right strategy will help you feel more confident about your financial future, allowing you to enjoy the retirement you deserve.