…Men and women who find themselves suddenly single in midlife need to plan carefully and make thoughtful decisions about such things as how to divide up assets and the best ways to handle the money they’ll receive.
Divorce is messy. Period. This is especially true when your retirement or your estate are up for grabs.
When young marrieds split up, the biggest issue may be who gets the dog. However, when divorce happens later in life, it can present some truly unique challenges.
A recent Forbes article titled “4 Divorce Mistakes That Can Derail Retirement” is a good hip pocket guide to help you stay in the clear.
So, what is a divorce “mistake” that matters?
First, here is some perspective:you are dividing your life up at a time when your life savings are more than just a full piggy bank. There is more at stake than your dog. In fact, your life savings will be needed shortly to fund your retirement needs.
Accordingly, a late-in-life divorce mistake that will cost you is one that does not carefully consider the
value and use of the assets you share, or the costs.
In brief, mistakes include:
Blithely choosing the house over other financial assets
Ignoring the tax implications of retirement funds
Rolling a spouse’s retirement account directly into an
IRA immediately after divorce
Dipping too much into retirement savings because of the
tax penalty waiver
Now, this list is really just the beginning. What about your estate? Effectively, divorce is also a threat to
your current estate and future plans for it. Are you ready for half of it to disappear?
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Reference: Forbes (August 21, 2013) “4 Divorce Mistakes That Can Derail Retirement”