Undergoing a divorce can be a juggling act involving the law, emotions and finances. This is especially true for couple overs 50 ending their marriages who accumulated assets over many years. These divorces may also involve a spouse who has not worked for years or played a role in the family’s finances. Preparation can prove invaluable in this area of family law.
Prepare a new budget
Establishing two new households and assuming expenses that were previously shared can be expensive. A realistic budget can help deal with these new expenses and avoid costly miscalculations. An emergency fund, even under $100 per month, is recommended for savings.
Avoid risky investments or investments guaranteeing high returns. Invest in basic index funds based upon the stock and bond markets.
Get back to work
Courts may consider a stay-at-home spouse’s contribution to the marriage when dividing assets. But it is important to take a job and get into a routine that can build confidence. Do not be overly choosy. A job may be the only method to obtain health insurance until you are eligible for Medicare at 65.
Consider Social Security
Collecting Social Security benefits should be delayed as long as possible. Waiting until the full retirement age, 70-years-old, can add thousands of dollars of benefits. A spouse is eligible for benefits based upon their former spouse’s work history if the couple was married for at least 10 years.
Establish a retirement account
An IRA is a tax-deferred retirement method for depositing retirement assets obtained from a former spouse without penalty. A spouse who does not have an IRA should set one up before their divorce is final so assets may be transferred directly into it without penalty. This is important for a spouse who did not work outside the home or deal with the family finances.
Use real estate wisely
Selling the house may be sad but may constitute the only useful source of retirement assets after it is sold. Sale proceeds can cover long-term expenses or a health emergency.
Concluding a sale early is better than undertaking this lengthy process in an emergency. Also, upkeep of a house can be costly and drain finances.
Obtaining a fair and reasonable decree is essential for dealing with these issues. An attorney can pursue this and deal with other divorce matters.
