Getting a divorce is a stressful pastime for everyone involved. Not only is the entire process expensive, but a divorce takes a toll on both individuals involved, emotionally and financially. If there are kids involved, there is even more that comes along with the process. When it comes to your financial future, a divorce can also have a huge impact on your ability to save for retirement. Keep reading to learn how your retirement plan could shift your plan should you and your spouse choose to get a divorce.
- They Are Expensive
As mentioned above, divorces are extremely costly. In order to pay for the legal support you need throughout your divorce, you may end up withdrawing some of your retirement savings. Legal support is typically very expensive, no matter what the need is. It is very common for divorcees to dip into their lifetime retirement savings to pay for what they need before and during the process.
- Women Take a Hard Hit
Women getting a divorce typically have less in their retirement savings than men, and if they get a divorce, the savings they have will continue to drain without proper planning. In order to prevent having no money post-divorce, you will want to make sure you are aware of exactly how much you have in assets. Rather than wait until it is too late, take ownership of your own assets and make sure they are accounted for throughout the divorce process.
- Your Retirement May Be Pushed Back
You may have planned to retire by a specific age and with a specific amount in the bank, however, getting a divorce can hugely impact the timeliness of your retirement. Several things impact if and when you are able to retire, such as living expenses in retirement, child support, spousal support, if you have a prenuptial agreement or a postnuptial agreement, etc.
It is key to take into account each of these three things when considering, or in the process of, getting a divorce. As we mentioned above, divorce is hard for everyone involved: each of the spouses, kids, grandparents, and even close friends. What makes divorce even harder is improper financial planning and consideration of the future. If you or someone you know is going through a divorce, is everything related to finances taken care of?
Retirement and divorce are both expensive parts of life that can either be planned for the proper way, or they can crumble the savings you have been working hard for since you began your working career. In order to make sure you are accounted for throughout and after your divorce, make sure you speak with a financial professional to ensure you and your kids are accounted for when retirement gets closer.
If you would like to speak to one of our advisors about your divorce and financial future, give us a call at 301-652-9677. We are here for you.
Sources:
https://www.fool.com/retirement/2020/08/13/a-divorce-big-impact-on-your-retirement-savings/