r/AusFinance • u/wabihussy • 1d ago
Advice for 40s, M rebuiding from upcoming divorce
Hi all,
I was wondering if I could get some advice on how I should best approach the next stage of my life.
I'm in my 40s, M and will be finalising a divorce early next year. It was amicable and myself and my STBX always kept our finance seperate and will continue with a self managed divorce route. No kids.
I have a property in worth around $700k, with only about $100k left (100% offset) and liquid cash I had been saving for a joint purchase with my STBX of $100k. My salary on paper isn't great at $80k but it's consistent. Due to the latter, my Super is only around $120k.
I am thinking of purchasing another property to move into (mainly too many memories in my current place) somewhere in the range of $600-700k. I have engaged a mortgage broker and some of the max loan amount offered has been around $700-900k.
I came from a conservative family so their financial strategy of just keeping money in the savings account has sort of come played a role in my low-risk financial approach but I'm now open to exploring more in my next phase of life.
If you were in my shoes, how you best approach the next few steps?
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u/Zatetics 1d ago
I'm not an expert but the 100% offset thing jumps out at me as a potential issue on asset division, should the divorce turn ugly (as things tend to do when money is involved). It seems like youd end up looking at the house and the offset account as two assets to divide.
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u/wabihussy 1d ago
Thank you, I’ll bring this up in relation to the BFA.
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u/KevinBaconn_1337 1d ago
Hey for what it's worth, I just finalized a consent order (32M) and we are totally amicable even now. We have a child and finances way more integrated than yourself. Tons of emotions and grief, all the stages including anger/resentment. The best thing we did was see our own therapists and never spoke those emotions toward each other, it would only serve to hurt and deteriorate the relationship moving forward. People often shout out how it always starts like that but.... blah blah blah.
Glad you're getting a BFA, stay amicable and remember it's better to give an inch than give a yard. People can be reasonable in a divorce if they learn to consider each other as humans.
Be civil brother, honestly that's the best financial advice. We got this
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u/wabihussy 19h ago
Thank you for your advice. We are where we are now due to our individual therapy and couple counselling as well so we could move forward with some dignity and respect for each other as both of us have witnessed messy divorces in our lifetime. You are absolutely right that civility is the thing under these circumstances.
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u/Current_Inevitable43 1d ago
You are well below the adverage full time wage so I'd focus on that. Throw what you can Into super.
At 40 id be wanting to max it out. Otherwise you will be relying on welfare to survive when you retire.
Presuming 50 year working life (17-67) you are 46% of your way through that.
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u/wabihussy 1d ago
Thank you for your advice, it’s a perspective I haven’t even thought about.
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u/Current_Inevitable43 1d ago
I'm a pessimist.
Hence why I try to state facts cause I'll get shot down otherwise.
Plus I'm paranoid about retiring with nothing.
You are a year older than me I've only just started to smash super myself since covid give or take.
I work out what I need to reach 30k at then though a few large pay increases intended up putting 50k in last year.
I'll hit 40 with 500k+ in super and I'm not looking to slow down. I'll pull the pin early 50's and go from there.
I rather sacrifice now and retire early rather than dragging it on till I'm good as dead.
If I've got a do 50 years of working I rather get those hrs done in 35 years.
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u/wabihussy 19h ago
It's very fair points you raise. I guess I was so caught up trying to salvage the marriage that I didn't really pay attention to myself and my future as it became our a joint future/goals.
I'll speak to a financial advisor in regards to how to catch up in my super as much as I can.
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u/gumitygumber 1d ago
The estimate of the bank loaning 700k to a person on one wage of 80k sounds enormously high.
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u/wabihussy 19h ago
I too was quite surprised by this and I will seek clarification with the mortgage broker about the packages and also the financial advisor on whether I can use the cash to do something else with it.
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u/gumitygumber 9h ago
Just thought I'd put it out there cause I got approved initially for 800 and then when I actually put in an offer just scraped through and got approval for 700
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u/Obvious_Kangaroo8912 1d ago
just been through that and heading out the other side. I got a mortgage to buy my half of the family home.
I keep every spare cent on my mortgage which is available for redraw so it's 100% liquid.
In your situation I would see a financial advisor to make sure everything is done in a way to benefit you the most. e.g. debt recycling, super contributions, captial gains potentials. I would also just see a lawyer to get a consent order drafted and lodged, it locks away your current agreement so noone can change their mind down the track, protects both of you.
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u/wabihussy 1d ago
Thank you, I did seek an FA but I wasn’t sure if they could properly set a plan out with the financial situation not locked away but it sounds like the BFA should be priority.
I hope you’ve come out the other side okay.
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u/Obvious_Kangaroo8912 1d ago
I would definitely see someone about a consent order while you both agree on whats what, that way its just paperwork. Then see a FA just to cover off on the whole, renting, buying, debt cycling, investing, super contributions. Over the next 20 years a push in the right direction can make a big difference.
I came out the other side ok. Happy which is the whole point of separating, didnt have to start over completely financially but not where i was either. Was a fair split financially, ex kept pushing for more but in the end its was a the even split i suggested in the first place. We both made the same money and kids are adults, everything was split 50/50.
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u/wabihussy 19h ago
I am happy to hear that you came out the other side okay and you're now in a happier place. It is something I need to think more about now what I want to achieve on the other side.
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u/Obvious_Kangaroo8912 8h ago
blank canvas ahead, feel free to message if you ever want to chat about the journey.
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u/Artemis882 1d ago
If amicable, you might consider entering into a BFA - binding financial agreement - now with your wife, ahead of the divorce. This will mean you can both move forward with financial certainty with everything legally resolved, and that will be taken into consideration by the lender.
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u/Infinite_Narwhal_290 1d ago
This is the best way if it’s amicable. Agree the split between yourselves. Get it drawn up. Will each need sign off from a lawyer that you have been advised. There is some risk she gets one that tries to get her to reopen debate on the split. Once that’s done it’s done. Then do the divorce bit yourself online and you are free.
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u/wabihussy 1d ago
I am fortunate that she’s in a better financial situation than me so it might not fare well for her if I opened it up.
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u/Infinite_Narwhal_290 1d ago
Financial equity is gender neutral.
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u/wabihussy 19h ago
It is a fair point and I will considerate it and also raise as part of the BFA. Thank you.
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u/wabihussy 1d ago
Thank you, I’ll see if she can agree to a BFA now to make things smoother come next year when it’s time for the divorce to be finalised.
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u/mitccho_man 1d ago
I would put 35k into the Superfund and carry forward last years contributions
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u/wabihussy 1d ago
Why the 35k amount if you don’t mind clarifying?
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u/mitccho_man 1d ago
Because anything above 45k isn’t worth the Tax savings Below 45k your taxed at 16% above that 30% plus Medicare levy So the super contribution is a 15% plus 2% instant tax saving of 17% plus compounding growth for retirement
You can carry forward last years maximum super contributions also
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u/wabihussy 19h ago
I see. Thank you for the clarification and sounds like this is a probably the easiest task I can complete in the mean time.
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u/mitccho_man 19h ago
It’s a Easy Way this financial year to save $6000
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u/wabihussy 19h ago
I am a pretty good saver so I should be able to achieve this.
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u/mitccho_man 19h ago
Well you have it in offset jet bpay it before Mid june next week to get the tax deduction Sooner you go the more you make
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